Can I reclaim mis-sold mortgage life insurance?

MJB1980

Hi all,

Can anyone advise on whether I have a valid reason to reclaim mis-sold life insurance when I took my mortgage out?

I bought my first house for £95k in June 2005, taking out an £80k mortgage with Alliance & Leicester. This mortgage is now taken over by Santander following the A&L buy out and is still being repaid.

Running alongside my mortgage I have a life insurance policy with Legal & General that, in the event of my death, covers the outstanding remaining balance on my mortgage policy only. I pay £7.72/month for this policy and this amount remains constant every month throughout the 25-year term.

The terms and conditions of my mortgage state that this life insurance policy has to remain in place for the entire term and to cancel it would be a break of the mortgage agreement. When the mortgage deal was offered by A&L, I was given no choice of life insurance policy or provider, it HAD to be Legal & General and HAD to be this policy, kind of like a bolt-on to the mortgage.

Would this constitute mis-selling of the life insurance policy by Alliance & Leicester and would I be able to submit a claim to Santander?

I have read answers on similar threads to this so please note:
The L&G policy covers me in the event of death only, not illness/accident/unemployment payment protection (I’m aware this isn’t PPI).
I did not receive any separate advice from financial advisors and did not use a mortgage broker, I approached Alliance & Leicester directly and this was the only offer that they gave me.
I do still have all relevant paperwork that clearly states that this policy had to be taken alongside the mortgage.

Any advice would be fantastic, thanks for taking the time to read.

Martin

[Deleted User]

It's not a mis sale, as it was a clear condition of the mortgage.

MJB1980

Do mortgage lenders have the right to insist you take life insurance, whether through them directly or via a third party, I thought that buildings insurance was all that was needed to protect their investment. I was told it was compulsory at the point of sale (for this particular offer anyway) and as far as I remember no checks were made to see if I already had adequate cover in place.

[Deleted User]

If they want to make that a condition, that is fine.

They could tell you that you need to purchase a small border collie if they wished. They just can't pretend you need to buy one if you don't.

dunstonh

The terms and conditions of my mortgage state that this life insurance policy has to remain in place for the entire term and to cancel it would be a break of the mortgage agreement.

There you go. it is a condition of borrowing. So, not missold.

When the mortgage deal was offered by A&L, I was given no choice of life insurance policy or provider, it HAD to be Legal & General and HAD to be this policy, kind of like a bolt-on to the mortgage.

That never used to be an issue but there was a rule change that meant the lender could not insist on their own provider. However, it was not retrospective. Also, you are not required, even today, to be given a choice. They cant insist on you using their tied insurer but they dont have to tell you that you can use others.

Would this constitute mis-selling of the life insurance policy by Alliance & Leicester and would I be able to submit a claim to Santander?

none whatsoever.