Protection for Life insurance.. mis-sold ??

Maddogjones

Hello all,

Have a bit of an issue and not sure what do do next. any advice would be great

My father was made redundant in November 2011 and when they received the redundancy payment they were bombard with calls from they're bank asking them to go in to 'discuss their account'.

They called in saw a Scottish widows rep who took, from what I gathered, a keen interest in what they were going to do with the payout and began to push them into paying off their mortgage and taking out this protection of life policy. They reluctantly agreed to do so.

Fast forward to 2016 - After noticing an issue that has arisen from clearing their mortgage, I noticed that life insurance sold by S.W. wasn't as it was described at the time they took it out. They were under the impression that they would pay into the policy for X amount of years and then when they died they would receive a payout based on the total they paid in. But looking closer at the small print, it turns out will have to pay into it for the rest of their lives (they're in their early 60's) and the max they would ever get as a payout is £4,000. If they cancel they get nothing. As far as other details I don't think the policy cover my mother because she has pre-existing medical conditions.

They have both said they didn't want it or want to pay off their mortgage at the time but they felt pushed into it.

Does anyone know if it's possible to cancel this and get their money back. This policy is costing them £30 p/m each and it's worth nothing to them.

Thanks for reading. sorry if this is an oddball question or I've not made much sense. I'm typing it in my lunch break.

Gaz.


P.s Issue that came up which brought the above to light is that when the Scotts Widow rep cleared the mortgage she neglected to cancel PPI payments. So They've been Paying PPI on a mortgage they don't have.

To note; Have called S.W and the adviser said up to parents to cancel it at the time. And when I disagreed and asked for a refund the adviser's response wasn't great.

stator

The first step is to start with a formal letter of complaint. Put all the facts in and see what they say.
Sorry I don't know if you have much chance.

dunstonh

They were under the impression that they would pay into the policy for X amount of years and then when they died they would receive a payout based on the total they paid in.

AFAIA, Scottish Widows do not offer any such product that does that.

But looking closer at the small print, it turns out will have to pay into it for the rest of their lives (they're in their early 60's) and the max they would ever get as a payout is £4,000. If they cancel they get nothing.

What does the quote say that was issued at point of sale?
What does the suitability report/statement of demands and needs say that was issued at point of sale?

As far as other details I don't think the policy cover my mother because she has pre-existing medical conditions.

Life assurance asks medical questions. They offer cover/price based on those questions.
Life insurance (such as over 50s plans) do not ask medical questions but they pay out as long as the person survives for a minimum period (typically a year or two) irrespective of health.

What is the name of the plan sold?

They have both said they didn't want it or want to pay off their mortgage at the time but they felt pushed into it.

If they raised this complaint back in 2011, then it would have been quite credible. Or had they exercised the cancellation rights back in 2011 then it would have been credible. However, 5 years after the event, there is little credibility with that argument.

Does anyone know if it's possible to cancel this and get their money back. This policy is costing them £30 p/m each and it's worth nothing to them.

It can be cancelled whenever they like. They can complain. However, I would suggest clarifying some of the info first as the information you have given her is conflicted. Making a complaint whilst not fully aware of the facts, can lead to a rejection. For example, if it is an over 50s plan and the documentation issued at the time says it was an over 50s plan and the quote terms are all correct then its difficult to argue a wrongdoing.

P.s Issue that came up which brought the above to light is that when the Scotts Widow rep cleared the mortgage she neglected to cancel PPI payments. So They've been Paying PPI on a mortgage they don't have.

To note; Have called S.W and the adviser said up to parents to cancel it at the time. And when I disagreed and asked for a refund the adviser's response wasn't great.

SW reps have no permission to cancel general insurance policies. They could get a written template for your parents to sign and send on but a member of staff cannot cancel a policy without written authority from the policyholder or if the policyholder cancels the direct debit.

Maddogjones

dunstonh wrote: »

AFAIA, Scottish Widows do not offer any such product that does that.

I understand they don't offer that sort of product. But, that is what they were lead to believe when they were sold the policy.

dunstonh wrote: »

What does the quote say that was issued at point of sale?
What does the suitability report/statement of demands and needs say that was issued at point of sale?

The only documents they had named my father and mother and lists, age, address, sex, monthly amount for each and states that the Max payout is £4000. It say nothing else. So if they live for another 20 years and pay in all that time they'll only get £4000.

dunstonh wrote: »

Life assurance asks medical questions. They offer cover/price based on those questions.
Life insurance (such as over 50s plans) do not ask medical questions but they pay out as long as the person survives for a minimum period (typically a year or two) irrespective of health.

What is the name of the plan sold?

No medical questions or checks. They were with the S.W. woman for about 40 mins.

The policy is called "Protection for Life plan" - http://www.scottishwidows.co.uk/life_insurance/life_cover/

forms have no mention of critical illness component as part of the cover.

dunstonh wrote: »

If they raised this complaint back in 2011, then it would have been quite credible. Or had they exercised the cancellation rights back in 2011 then it would have been credible. However, 5 years after the event, there is little credibility with that argument.

Unfortunately, My parents think with a 1950's logic in that Drs, Police, Bank managers are "trusted" members of society who are as honest as the day is long. So when the Bank called them in and said 'you really do need this', 'don't waste your savings' and 'don't worry I can sort the paper work' my parents are the type to go with what they're being told.

Yes.. I know, it's stupid.

dunstonh wrote: »

SW reps have no permission to cancel general insurance policies. They could get a written template for your parents to sign and send on but a member of staff cannot cancel a policy without written authority from the policyholder or if the policyholder cancels the direct debit.

I know they can't just cancel. But if the PPI is a component of the mortgage then surely it should have autoatically cancelled when the Mortgage was clear in 2011.

Thanks for points raised.

dunstonh

The only documents they had named my father and mother and lists, age, address, sex, monthly amount for each and states that the Max payout is £4000. It say nothing else. So if they live for another 20 years and pay in all that time they'll only get £4000.

That is how life assurance works. You pay £x pm for z years and in return, if you die the insurer pays out £y. In this case £x is £30 and y is £4000.

Unfortunately, My parents think with a 1950's logic in that Drs, Police, Bank managers are "trusted" members of society who are as honest as the day is long. So when the Bank called them in and said 'you really do need this', 'don't waste your savings' and 'don't worry I can sort the paper work' my parents are the type to go with what they're being told.

Yes.. I know, it's stupid.

It is stupid but you are right. It is not that uncommon with that generation. However, if they said yes to it and the suitability report matches the product and there is a financial need then its unlikely a complaint would be upheld. Hence why the need to look at the documentation issued at point of sale.

I know they can't just cancel. But if the PPI is a component of the mortgage then surely it should have autoatically cancelled when the Mortgage was clear in 2011.

Loan and credit card PPi are a component of the loan and credit card. MPPI is standalone. It is one of the reasons you see most MPPI mis-sale complaints get rejected (whereas most loan and credit card PPI complaints are upheld). People move their mortgages around nowadays and the insurance can be used with any mortgage in most cases. If the bank auto-cancelled mortgage insurances without permission and the person went on to suffer a claimable event, then the bank would be criticised.

Whilst most MPPI covers all mortgages, it may be worth checking this one to see if it does. If it does not, then that is a pretty good complaint reason and they should refund premiums from the point the mortgage was paid off. If they do cover other lenders but the mortgage was repaid and no other mortgage exists, then they are totally reliant on a goodwill gesture to refund some of the premiums. Sometimes you see them refunded, sometimes not.

Maddogjones

@dunstonh

Thanks for the reply.

The MPPI only applies to that mortgage. Have type a letter asking fo a refund.

As to Life cover they already have cover in place that they purchased in '08 which gives them what they need. At the time they were sold the Protection of life cover they also had savings plus a redundancy payout. Would this mean they had no financial need for the the additional 'Protection for life cover'

Thanks

Gaz

jonesMUFCforever

Are these policies similar to the over 50's plans sold by SunLife and others and are really funeral plans?
I can't see a connection between this and any mortgage.