Mis-Sold Life Insurance

Stevie_72

Hi - could it be possible I have been mis-sold life insurance ? What I mean by that is - is this possible in the way that PPI has been mis-sold ?

I took out life insurance because I thought I had to, my employer has death in service cover which far exceeds the life insurance cover. I have had this for roughly 13 years, been with the same employer for 20.

Was this life cover unnecessary - meaning it was mis-sold ?

dunstonh

could it be possible I have been mis-sold life insurance ?

Theoretically yes. Statistically likely, no. There are very few complaints about life assurance sales.

What I mean by that is - is this possible in the way that PPI has been mis-sold ?

Anything can be missold potentially. However, life assurance is a very simple product to understand and suffers none of the product issues that PPI does. So, the reasons are unlikely to be similar.

I took out life insurance because I thought I had to, my employer has death in service cover which far exceeds the life insurance cover. I have had this for roughly 13 years, been with the same employer for 20.

Most death in service is no more than 4 times pensionable salary. 2x being the most common. The purpose of death in service is to cover loss of short term income and perhaps some of the lost pension benefits.

Was this life cover unnecessary - meaning it was mis-sold ?

You havent told us what the life assurance was for.

Typically, if you have financial dependents (i.e. spouse/partner/children) the crude ballpark figure for the amount of life assurance you need is around 20x income PLUS the amount of any debts (such as mortgage) minus any existing provision. So, lets say you had 4x DIS. You would still need 16x income plus debts.

So, its very unlikely your DIS was anywhere near suitable by itself.

Stevie_72

Many thanks for the reply. I took out the life insurance to cover the remainder of my mortgage only - which was roughly £70k, the sum assured was £80k. This was joint cover with my wife. We both work for the same large financial company so our DIS cover easily exceeded £70k. It was at that time as you suggest 4 x pensionable salary.

dunstonh

So, its clear you didnt have enough life assurance/DIS and that the recommendation was suitable. Indeed, if you dont have any more life assuarnce today, then its likely you still have a shortfall.

Stevie_72

My mortgage had £70k remaining, the life cover was for £80k my DIS at that time 13 years ago would have been £140k. This life policy was to cover the mortgage only.

jonesMUFCforever

What would have happened if you had changed jobs - your new employer might not have offered the same death benefits.

dunstonh

Stevie_72 wrote: »

My mortgage had £70k remaining, the life cover was for £80k my DIS at that time 13 years ago would have been £140k. This life policy was to cover the mortgage only.

DIS is not meant for mortgage cover. Its purpose is to cover short term loss of income and reduced pension benefits.

its normal and correct to disregard it for mortgages. However, lets say you personally decide to allocate it to the mortgage. That leaves you with a shortfall in the other areas. So, one way or the other, you have a shortfall now and you have a shortfall then.

pigieon_widow

Hi, i have been with paymentshield for many years, taken through a broker when my mortgage supplier daid i needed one. I took payment shield as a carer in case something happened. After 20 years at 61 i have been made redundant, so as already an unpaid carer for 3 family members i decided to recuperate and concentrate on my caring roles and becoming stress free ( almost) for a while) . Paymentshield tell me they cannot pay my mortgage as i left due to redundancy and not as a carer. My workplace are annoyed as i have asked many times if it would be better to leave due to so many commitments but kept trying to accomodste me. My sister tells me that as my company paid 6 months sick leave anyway so i didnt really need to have Paymenshield. Is this rivht and could i claim my mppi back?
Thank you for your help.

dunstonh

Is this rivht and could i claim my mppi back?
Thank you for your help.

Paymentshield never offered life assurance (the subject of this thread).

foxy-stoat

Stevie_72 wrote: »

My mortgage had £70k remaining, the life cover was for £80k my DIS at that time 13 years ago would have been £140k. This life policy was to cover the mortgage only.

Naaa you havent mis sold or mis bought. If the mortgage balance was £30K when you died then the balance would of gone to your Estate.

Nice try though, if you can think of anything else that could of been mis sold post back.

[Deleted User]

foxy-stoat wrote: »

if you can think of anything else that could of been mis sold post back.

The poster you responded to made his post (back in April) and hasn't logged on since..:)