Is "life assurance" the same as PPI?

SharkyGeorge

Hi,

Please don't laugh if this is a stupid question- am very new to all of this!!

Is "life assurance" the same as PPI? Because myself and my O.H. were told we had to take out "life assurance" for our mortgage, and on the statements it appears as PPI but apparently only covers death, and doesn't seem to cover the categories of injury, illness or unemployment.

I was self-employed when I took mine out, a few years after my O.H. When he took his out he was unmarried and had no kids - and I thought life assurance was only useful because it protects dependents?

The other thing is that this was taken out around 1983: however I still have all the documents. I would be massively grateful to anyone who could clear this up!

Thanks!

Sharky

PS Am posting here because it doesn't appear to be covered by the FOS, though this may be because I don't have a claim.

jonesMUFCforever

No it is not.
Years ago it was compulsory that you took out sufficent life cover to pay off the mortgage.
This is a good thing surely - why would you not want to have cover?
Why should your next of kin have to sort out your mess if you pop your clogs early??

SharkyGeorge

ejones999 wrote: »

This is a good thing surely - why would you not want to have cover?
Why should your next of kin have to sort out your mess if you pop your clogs early??

Ok, so this is what I was asking - there's no need to be so cutting.

PPI has lots of different names and I wanted to check if this was some sort of predecessor which I'd been mis-sold, especially as I was told I had to take the assurance.

MIKELSOK

Sharky,

Being in the same position as yourself, I too have pondered on the 'Life Assurance' versus PPI conundrum. When you think about it they are VERY similar and were sold as 'Compulsory' products. The Big question therefore is 'Where the institutions acting Legally'? , ie, Were the banks or mortgage providers acting within the law by insisting that they be taken up? If not do we have a case?

Further, when you look at the terms of these products they are almost a carbon copy of PPI with respect to their get out clauses and in my case being self employed at the time had to point the policy towards my wife who was in full time employment. I bet if one was to dig deeper there will be many gaping holes in the validity and credibility of these policies. Maybe they will be next on the Radar.

Over to you Martin.

jonesMUFCforever

Mikelsok you ask if the banks acting legally - there is nothing illegal in saying to someone that if you want a mortgage from us then you have to have adequate life cover.
Whether you bought it from them or from another provider is not relevant - but it was the case that you had to have it (Similarly they wanted confirmation that you had adequate buildings insurance).
The number of people in this country today who have no life cover to pay off their mortgages let alone leave something to their dependants is frightening.

SharkyGeorge

But what if you don't have dependents?

And is life insurance/assurance compulsory for every loan?

Additionally, if, as in my and Mikelsok's case, the banks were claiming this was compulsory to purchase together with the loan (and, in the same way that PPI is, added onto the total loan meaning you pay interest on it) is this actually legal? After all, this could count as being mis-sold if you could've bought the loan elsewhere for cheaper. Also, I'm sure there must be similarly tight terms and conditions which means it is difficult to claim.

It would be very interesting to hear from others in the same position or who've had experience claiming. Perhaps worth starting a new thread?

jonesMUFCforever

SharkyGeorge - you say that you don't have dependants.
I'm sure your partner thinks the world of you too! Does this not count as a dependant.
You die unexpectedly what happens to the mortgage - sod it I'm dead I don't care - is that your attitude?

SharkyGeorge

He took it out before marriage - originally he was single and covering the mortgage by himself, at which time he had no dependents (including myself, since we hadn't even met).

MIKELSOK

eJones999

You state'

"Mikelsok you ask if the banks acting legally - there is nothing illegal in saying to someone that if you want a mortgage from us then you have to have adequate life cover."

If the above was the case then surely one could argue that PPI came under the same ruling, which as we are learning is now subject to a question of credibility. I do off course recognise that where people have been sold PPI without their full knowledge then that is very worrying and maybe this is the basis of Martins claim. The main concern I have however is that policies like PPI and Life Assurance have been 'Bolted' on by the Banks perhaps needlessly in some cases, and with many not really understanding their limitations. The policies are also usually full of many complex get out clauses that make them virtually worthless anyway in the event of a claim, this is where the con lies and needs to be addressed.

MIKELSOK

eJones999

You state'

"Mikelsok you ask if the banks acting legally - there is nothing illegal in saying to someone that if you want a mortgage from us then you have to have adequate life cover."

If the above was the case then surely one could argue that PPI came under the same ruling, which as we are learning is now subject to a question of credibility. I do of course recognise that where people have been sold PPI without their full knowledge then that is very worrying and maybe this is the basis of Martins claim. The main concern I have however is that policies like PPI and Life Assurance have been 'Bolted' on by the Banks perhaps needlessly in some cases, and with many not really understanding their limitations. The policies are also usually full of many complex get out clauses that make them virtually worthless anyway in the event of a claim, this is where the con lies and needs to be addressed.