Mortgage & Payment Protection Scheme

stevieb1980

Hi, I'm not sure if this is the right section to post this query to, so apologies if it isn't!

Last year I changed my mortgage over to a new provider, and took out a Mortgage & Payment Protection Scheme arranged by the mortgage broker. I paid up front for the policy at a cost of £5,302.50 which guarantees a monthly benefit of £1,010.00 in the event of disability (max 24 months), or unemployment (max 12 months). The policy started in November 2006 and ends November 2013.

The company providing the policy say if I cancel the policy they "may" gave a refund of part of the premium. Now I haven't asked for an expected figure, but I guess it will be next to nothing as they claim most of the risk is at the start of the policy.

When taking out the policy I was and still am employed; however, in the very near future I am going to be working as a self-employed contractor. Contracts will typically be three to six months. I've read the small print and the policy seems incompatible with contractor work, e.g the policy will not pay out "if You were not in continuous Work for the 6 months immediately before Your employment ended".

When going through the process of re-mortgaging, I told the financial adviser that it may be possible I go into the contracting world in the near future. I have documented proof of this on the fact-find document. So do you think I have grounds to say this policy was mis-sold?

Thanks
Steve

payless

see http://www.moneymadeclear.fsa.gov.uk/news/payment_protection_insurance.html

and

http://www.moneymadeclear.fsa.gov.uk/news/ppi_information.html

petermb_2

My advice to anyone is never pay for single premium protection cover. It is very expensive and probably 50% of your premium is commission. The cheapest way to protect yourself is via monthly cover.

The other issue is that single premium payment protection normally only lasts for 5 years where monthly cover continues while you continue pay the premium.