Broker didn't cancel Life Insurance

sheepshead

Hope someone could give me some advice prior to potentially contacting insurance ombudsman.

I took out a Life insurance policy in 2009 through a broker that i have used for 20 years to cover a mortgage. In 2015 i remortgaged through the same broker which he recommended i take out a different life insurance policy to cover new mortgage as it was cheaper. The original life insurance that i took out in 2009 was now no longer needed.

I have just discovered that the life insurance taken out in 2009 wasn't cancelled and the direct debit of £40pm had been taken from my account from 2015 to 2019, approx £1600. (I thought the D/D was for another policy that i had with same broker).

The broker has stated that i should have cancelled my d/d in 2015 to cancel the policy!!! My argument is that surely it is the responsibility of the broker to cancel the 2009 policy prior to him offering me the new policy in 2015. I believe ive been miss sold a life insurance policy from the broker as ive had 2 policies when i only needed the one!

As a goodwill gesture the broker has offered to refund me at his expense 50% of the policy that i didnt need (£800).

Would i have a case with the insurance ombudsman to reclaim the full £1600?

Hope this makes sense and any advise is much appreciated

Thanks Sheepshead

BoGoF

What makes you think it was the brokers responsibility. In fact what makes you think he even could? The broker is not the policy holder so couldn't cancel it.

kelevraz

BoGoF wrote: »

What makes you think it was the brokers responsibility. In fact what makes you think he even could? The broker is not the policy holder so couldn't cancel it.

If someone takes out life insurance through a broker, then the broker is in effect the contact between them and the insurer.. so if OP actually ASKED the broker to cancel this policy, then there is zero reason the broker couldn't have done it.. failing to do so would be failure to carry out instructions..

OP, when you were sold your new policy in 2015 by the broker and he 'advised' you to cancel your old one, did you actually ask him to cancel it for you? Or did you just 'assume' that he would?

dunstonh

The broker has stated that i should have cancelled my d/d in 2015 to cancel the policy!!!

That is correct. Brokers cannot cancel policies. Only the policyholder can.

My argument is that surely it is the responsibility of the broker to cancel the 2009 policy prior to him offering me the new policy in 2015.

As the insurer will not take instructions from the broker, your argument fails.

I believe ive been miss sold a life insurance policy from the broker as ive had 2 policies when i only needed the one!

Nothing you have said suggests missale. Indeed, quite the opposite. i.e. Take out a new policy as it is cheaper than the old one. That is good justification with life assurance.

So, why do you think it was missold?

As a goodwill gesture the broker has offered to refund me at his expense 50% of the policy that i didnt need (£800).

That is very generous. He obviously values your relationship.

Would i have a case with the insurance ombudsman to reclaim the full £1600?

The expectation here is that you are told not to cancel the existing policy until the new policy has been accepted and is in force. If ther is no audit trail suggesting that was said then the FOS may take view. However, if the paperwork shows that you were told that, then the FOS will likely go with the audit trail.

Be aware that if your complaint fails at the FOS, then you may end up with nothing. A goodwill gesture can be withdrawn if you reject it and go to the FOS.

Weighty1

kelevraz wrote: »

If someone takes out life insurance through a broker, then the broker is in effect the contact between them and the insurer.. so if OP actually ASKED the broker to cancel this policy, then there is zero reason the broker couldn't have done it.. failing to do so would be failure to carry out instructions..

OP, when you were sold your new policy in 2015 by the broker and he 'advised' you to cancel your old one, did you actually ask him to cancel it for you? Or did you just 'assume' that he would?

As far as I'm aware, there's only 1 company which will cancel a plan on the request of the broker and that's AIG, ALL others require the client to either call in, write or cancel the payment. This avoids brokers making mistakes and canceling a plan in error.

On that basis, there is EVERY reason why the broker couldn't have done it.

kelevraz

Weighty1 wrote: »

As far as I'm aware, there's only 1 company which will cancel a plan on the request of the broker and that's AIG, ALL others require the client to either call in, write or cancel the payment. This avoids brokers making mistakes and canceling a plan in error.

On that basis, there is EVERY reason why the broker couldn't have done it.

Maybe i'm missing something then, because as far as i'm aware, the broker that sells you the policy does so as an agent/representative of the insurer. I've seen plenty of brokers call up, and state that their policyholder no longer wants the contract, and we've never denied the request

So asking the broker to cancel your policy, would in effect, be the same as asking your insurer to cancel the policy

As i said though, maybe i'm missing something

sheepshead

Thanks for all of your replies, suppose im a bit more wiser.

There's no audit trail whatsover from the broker, he states he told me to cancel d/d and i dont recall the verbal request..

Maybe i didn't explain clearly in my 1st post but i didn't expect the broker to physically cancel my own policy but to instruct me formally rather than just verbal instruction to cancel a d/d.

Is it standard practice within the industry to cancel a insurance policy by d/d?

Thanks for your responses

kelevraz

sheepshead wrote: »

Thanks for all of your replies, suppose im a bit more wiser.

There's no audit trail whatsover from the broker, he states he told me to cancel d/d and i dont recall the verbal request..

Maybe i didn't explain clearly in my 1st post but i didn't expect the broker to physically cancel my own policy but to instruct me formally rather than just verbal instruction to cancel a d/d.

Is it standard practice within the industry to cancel a insurance policy by d/d?

Thanks for your responses

Yes, cancelling your direct debit for an insurance policy will normally lead to it being cancelled with effect from the period the next payment was due..

They'll probably contact you once/twice to ask about payment, if you ignore them / tell them you don't want the policy any more, then it will be cancelled (and you may be charged a cancellation fee but thats a whole different story)

I have to ask though, and not to sound unkind, but what exactly did you 'expect' would happen then if you didn't actually want the broker to cancel the policy for you?

You bought another policy knowing there was another one in place, who did you think was responsible for actually cancelling your first policy?

sheepshead

kelevraz wrote: »

Yes, cancelling your direct debit for an insurance policy will normally lead to it being cancelled with effect from the period the next payment was due..

They'll probably contact you once/twice to ask about payment, if you ignore them / tell them you don't want the policy any more, then it will be cancelled (and you may be charged a cancellation fee but thats a whole different story)

I have to ask though, and not to sound unkind, but what exactly did you 'expect' would happen then if you didn't actually want the broker to cancel the policy for you?



You bought another policy knowing there was another one in place, who did you think was responsible for actually cancelling your first policy?

Suppose as i used a broker i was expecting more formal instruction from him to cancel but ultimately i now understand its my responsibility to cancel the policy

kingstreet

kelevraz wrote: »

Maybe i'm missing something then, because as far as i'm aware, the broker that sells you the policy does so as an agent/representative of the insurer

That's not the case.

A company representative authorised by the insurer could do that as agent of the insurer, but an IFA or similar is the agent of the client.

kingstreet

sheepshead wrote: »

Suppose as i used a broker i was expecting more formal instruction from him to cancel but ultimately i now understand its my responsibility to cancel the policy

FWIW we would confirm with you your preferred start date for the new cover and when done, would contact you again to confirm you should now cancel the existing cover.