Life insurance is it classed as PPI

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In October 2000 I got a mortgage through an independent financial adviser, he told me at the time that I had to take out a life insurance policy as part of the conditions from the mortgage company (Santander) for getting the mortgage. He arranged this with Scottish Provident. I recently paid off my mortgage so decided to cancel the policy. I called Scottish Provident and was surprised to find out that the policy had no connection with the mortgage it was just normal life insurance. I than called Santander and asked them if when taken out did that mortgage need to have a life insurance policy as part of the conditions. They answer was NO.
Was this policy mis-sold to me? Can I reclaim any of it back?

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  • societys_child
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    No, Life Insurance is not PPI.
  • Nasqueron
    Nasqueron Posts: 9,035 Forumite
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    painter_1 wrote: »
    In October 2000 I got a mortgage through an independent financial adviser, he told me at the time that I had to take out a life insurance policy as part of the conditions from the mortgage company (Santander) for getting the mortgage.

    He arranged this with Scottish Provident. I recently paid off my mortgage so decided to cancel the policy. I called Scottish Provident and was surprised to find out that the policy had no connection with the mortgage it was just normal life insurance. I than called Santander and asked them if when taken out did that mortgage need to have a life insurance policy as part of the conditions. They answer was NO.


    Was this policy mis-sold to me? Can I reclaim any of it back?

    One of two things will have happened here:

    The mortgage company required you to have life insurance or no mortgage, so you had a choice - take it or get a mortgage elsewhere = not miss-sold - the staff in Santander now may have a different policy to one that was in effect then

    Or, you miss-understood him and he actually said in order to get free advice from him you needed to make an insurance purchase through him (if you didn't pay for mortgage advice then chances are it was this)

    Was it miss-sold - are you immortal?

    When the mortgage was taken out did you have a partner/children i.e. dependants who a life insurance policy would "protect" if you died owing money on the mortgage?
  • dunstonh
    dunstonh Posts: 116,636 Forumite
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    Life insurance is it classed as PPI

    Life assurance is not PPI.
    In October 2000 I got a mortgage through an independent financial adviser, he told me at the time that I had to take out a life insurance policy as part of the conditions from the mortgage company (Santander) for getting the mortgage.

    It is possible that the lender did insist on it as a condition of borrowing. There were still lenders in 2000 that did insist on it. Although not many.

    It is more likely though that it was a condition of the financial adviser that to get free mortgage advice from them that you were required to buy an insurance policy. A model that is allowed as long as the insurance sold is suitable.
    I called Scottish Provident and was surprised to find out that the policy had no connection with the mortgage it was just normal life insurance.

    You shouldnt be surprised. No life assurance has a direct connection with a mortgage. They are standalone products.
    I than called Santander and asked them if when taken out did that mortgage need to have a life insurance policy as part of the conditions. They answer was NO.

    I'm surprised the person on the phone would remember. Maybe they were stating their current position. Or maybe they were right. However, its largely irrelevant.
    Was this policy mis-sold to me? Can I reclaim any of it back?

    It is unlikely. Most people take out life assurance to cover their mortgage. If you have a spouse/partner and/or children then taking out life assurance was common sense and correct. If you were single and living alone then you could make a case for it not being needed. Although its pre-regulation and even the FOS have rejected complaints made on that basis as mortgages are long term and even if you were single when taking it out, you may not be later.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Mr.Generous
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    I would think life cover could easily be miss sold, you just have to prove that you will live for ever and it would be a sure fire case.
  • magpiecottage
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    you just have to prove that you will live for ever.
    That might take a long time.
  • dunstonh
    dunstonh Posts: 116,636 Forumite
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    That might take a long time.

    And still there would be no time bar/limitations!
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Kalaidascope
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    I was sold life term insurance as well as ppi when I got my mortgage in 1992, I had a repayment on the ppi but should I have been sold both items .
    The mortgage has now been paid but the life term policy ends next year.
  • dunstonh
    dunstonh Posts: 116,636 Forumite
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    I was sold life term insurance as well as ppi when I got my mortgage in 1992, I had a repayment on the ppi but should I have been sold both items .
    The mortgage has now been paid but the life term policy ends next year.

    Life assurance and MPPI have absolutely no overlap.

    The ideal scenario is to have ALL of the following (subject to a few caveats):
    Life assurance (if married/partner and/or children)
    Critical illness cover
    MPPI
    PHI
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • [Deleted User]
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    should I have been sold both items .
    Life Insurance pays out in the event of death. PPI is a short term insurance covering sickness and unemployment.
    Thus the two are totally different.

    You could cancel the Life insurance now if you want, but you have no complaint of mis-selling.
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