I can't change life assurance provider?

cage_bomber

I've just taken out a first time mortgage through a broker and stupidly taken the Life Assurance cover from them too. I believe I was told that I had to take it from them, but I admit they may have meant that I have to have it but not necessarily from them.

later I discovered cheaper cover elsewhere but when I approached the broker about canceling the policy and changing to another one, which is a lot cheaper but doesn't include Critical Illness, he told me that I was taking a risk that the lender would withdraw the original mortgage papers, assess the new life cover policy then reissue new mortgage papers. However, if they didn't think the new policy fitted the bill then I would have no mortgage, have a rejection to my name and have to reapply from scratch for another mortgage.

With only 2 weeks until the agreed move in date, taking the risk of presenting to the lender the new life policy and possibly having to reapplying for a mortgage, time would be incredibly tight. So I felt I had no real option but to go with the original policy he gave me.

Can i get out of this policy (which is underwritten by Aviva)

My mortgage is with Nat West (through a broker) There is nothing in any of their literature that says I 'need' life assurance, only building insurance. I did sign various documents at the brokers when I was signing the mortgage application, I can't remember what they were :mad: and don't have a copy. Stupid schoolboy error
As yet I have not seen any life cover certificates or literature.

I canceled the building insurance that I arranged through the broker, which ironically was no problem, considering that is the cover the lender requires. It was astronomical too, twice the price i've ended up paying and no better.

Am I able to get out of this (without paying a fee/fine?)

I'm kicking myself for signing up to this.

Thanks for your help

Quentin

You cannot be 'fined' though may have to pay the broker if you agreed to any conditions whereby you would pay any clawed back commission should you decide to cancel.

Check any agreement you signed

cage_bomber

Quentin wrote: »

You cannot be 'fined' though may have to pay the broker if you agreed to any conditions whereby you would pay any clawed back commission should you decide to cancel.

Check any agreement you signed

thanks for replying

I don't have any paperwork other than my mortgage papers which don't detail anything about life cover.

How much could I end up paying them?

Quentin

Nothing if you weren't required to enter any agreement with the broker for his services!

dunstonh

I've just taken out a first time mortgage through a broker and stupidly taken the Life Assurance cover from them too.

Why is that stupid?

I believe I was told that I had to take it from them, but I admit they may have meant that I have to have it but not necessarily from them.

Hardly any lenders require life assurance nowadays. It tends to only be on commercial borrowing. However, it is a common model for some mortgage brokers to require a purchase of insurance if you want free mortgage advice.

later I discovered cheaper cover elsewhere but when I approached the broker about canceling the policy and changing to another one, which is a lot cheaper but doesn't include Critical Illness, he told me that I was taking a risk that the lender would withdraw the original mortgage papers, assess the new life cover policy then reissue new mortgage papers. However, if they didn't think the new policy fitted the bill then I would have no mortgage, have a rejection to my name and have to reapply from scratch for another mortgage.

That is complete BS and disgraceful.

Am I able to get out of this (without paying a fee/fine?)

You cant be fined but you may be tied to paying a fee if you cancel the insurance. That will be in the contract you signed with the adviser. If you fancy playing hardball, you could tell the adviser that they have outright lied to you and if they dont let you cancel without charge, you will make a formal complaint and go to the ombudsman if necessary. If the adviser is a member of a network or employed then you may want to complain anyway as their employer/network will not want them telling people this but wont know about it unless it is brought to their attention.

cage_bomber

dunstonh wrote: »

Why is that stupid?


Hardly any lenders require life assurance nowadays. It tends to only be on commercial borrowing. However, it is a common model for some mortgage brokers to require a purchase of insurance if you want free mortgage advice.



That is complete BS and disgraceful.



You cant be fined but you may be tied to paying a fee if you cancel the insurance. That will be in the contract you signed with the adviser. If you fancy playing hardball, you could tell the adviser that they have outright lied to you and if they dont let you cancel without charge, you will make a formal complaint and go to the ombudsman if necessary. If the adviser is a member of a network or employed then you may want to complain anyway as their employer/network will not want them telling people this but wont know about it unless it is brought to their attention.

I feel stupid having bought the policy from him as most things i've read say not to buy it from the mortgage broker. Its £200 per year more than equivalent policies I've seen. I should have been more clued up before I went in to see him. But then it's the way he worded it that got me, saying "I had to have it", I shouldn't have fell for it or I've stupidly misunderstood what he meant by that.

I've payed a brokers fee for the mortgage.

I've asked for a copy of all the documents i've signed including the paperwork for the life policy so maybe there will be a cooling off period.

Is there any point in contacting Aviva and asking them what they might 'claw back' from a broker?

Thanks for the help :beer:

cage_bomber

Quentin wrote: »

Nothing if you weren't required to enter any agreement with the broker for his services!

I signed something to say "he hadn't given me advice today".

pinkteapot

This broker... Did he work in an estate agent's office by chance?

pinkteapot

Suspect you're exactly that right that Natwest only actually require buildings insurance (pretty much all mortgages do but as above, hardly any require life assurance).

Phone Natwest's mortgage customer line yourself and double-check if you want to be on the safe side.

If they say there's no requirement, you're absolutely free to change, subject to any clawback fee you may owe the broker for taking a product from him and cancelling soon after (check his T&Cs).

Quentin

cage_bomber wrote: »

Is there any point in contacting Aviva and asking them what they might 'claw back' from a broker?

Not really.

It's the contract (if any exists) between you and your broker that would set out any penalty you may have agreed to pay should you want to end the policy early

Weighty1

One thing to be aware of, you mention the plans you found don't include critical illness cover and the one you arranged does. You are about 4-5 times more likely to claim on a critical illness plan so this may be why you are finding the quotes so much cheaper. If you run like for like quotes then there may not be much difference. Whilst you *could* change to life insurance only (notwithstanding any commission clawback charge) you should ask yourself how you'd pay the mortgage if you didn't work for 12-months whilst being treated for cancer, or if you were paralysed in a car accident or any number of things which does unfortunately happen to people.