Life Insurance mis-sold but still want product

Jussy123

I have a slightly strange situation. I believe that my life insurance was mis-sold to me when I took out my mortgage (Nationwide) in 2000. The mortgage was arranged by a RightMove broker who worked for the insurer. It is now Aviva, although I have a feeling that it was Legal & General back then, or at least some different name from Aviva. It is frustrating because the policy has not increased in value with my house, and so it cannot even cover the full value any more. I feel that as a matter of principle, I should challenge this.

I remember distinctly how the advisor told me that I had to take this and another policy out, which I believe was common and legitimate practice in the 1990s, but should not have still been happening by 2000, although I have read elsewhere of a few companies still doing this legitimately by then.

As the PPI claim deadline approaches I am considering trying to claim this on the moral ground that it was mis-sold, but the problem is that I do not wish to be without any cover. My wife now has a health condition that will make taking out a new policy difficult, and so actually I feel some dependency on the old one.

If I claim, will my policy be automatically terminated (should I win), or can I get a refund and then continue to hold the mis-sold policy?

Brodiebobs

I think you are confusing what a life insurance product covers, it's either a set amount (usually linked to your purchase price/mortgage amount) or a decreasing term which goes down in value, as you pay off your mortgage.

As far as i'm aware there are no products which increase in line with property values. If you have re-mortgaged and your mortgage debt has increased you are usually advised to ensure you review your life insurance so it covers the balance outstanding.

I very much doubt you have a case for 'mis-selling'.

Jussy123

Many thanks for the swift reply Brodiebobs!


Yes, what I said was confused/confusing!


What I should have explained is that I own 50% of a shared ownership property and the insurance will of course cover the mortgage, but the other 50% has increased in value. Whilst the policy does indeed cover the full value of the house in 2000, should I need to claim on it, I cannot now buy back the other 50% as I would have been able to then.


Does that help to frame my original question rather better?

SonOf

It is now Aviva, although I have a feeling that it was Legal & General back then, or at least some different name from Aviva.

L&G are nothing to do with Aviva. Aviva used to be Norwich Union.

It is frustrating because the policy has not increased in value with my house, and so it cannot even cover the full value any more.

There is no such product on the market that does this.

I remember distinctly how the advisor told me that I had to take this and another policy out, which I believe was common and legitimate practice in the 1990s, but should not have still been happening by 2000, although I have read elsewhere of a few companies still doing this legitimately by then.

Whilst the numbers of lenders still requiring it in 2000 was low, it was still normal for mortgage brokers to have a model that required you to purchase insurance to get free mortgage advice. That model is allowed as long as the insurance is suitable. And as most people have a need for life assurance on mortgages, that is rarely a problem.

As the PPI claim deadline approaches I am considering trying to claim this on the moral ground that it was mis-sold,

Life assurance is not PPI.

but the problem is that I do not wish to be without any cover.

Voiding the policy is a normal outcome. You cant have your cake and eat it.

What I should have explained is that I own 50% of a shared ownership property and the insurance will of course cover the mortgage, but the other 50% has increased in value. Whilst the policy does indeed cover the full value of the house in 2000, should I need to claim on it, I cannot now buy back the other 50% as I would have been able to then.

No product does that. It is your responsibility to change or revise your insurances over time to meet your financial needs.

Brodiebobs

I must admit i don't know much about shared ownership, but i'm perhaps naively assuming the mandatory requirement for life insurance may only have been for your mortgage and not the total value of the property.

So even when you took it out it wouldn't have paid for the full property, only the outstanding mortgage. But i may stand corrected!

You would need to establish what the original cover was you took out.

[Deleted User]

Jussy123 wrote: »

As the PPI claim deadline approaches I am considering trying to claim this on the moral ground that it was mis-sold

What you propose to complain about is NOT in any way PPI and so the deadline for complaint does not apply.

Jussy123 wrote: »

It is frustrating because the policy has not increased in value with my house, and so it cannot even cover the full value any more. I feel that as a matter of principle, I should challenge this.

The policy is not designed to increase in value in line with the cost of your house. It's designed to help pay off whatever is left of your mortgage should you die before it's paid. If you want additional cover for your particular circumstance, you would probably be wise to seek the assistance of an Independent Financial Advisor.

Certainly, what you describe is no way mis-selling and any "complaint" you might make would not result in any refund. Again, the insurance is not PPI.

-taff

Jussy123 wrote: »

I took out my mortgage (Nationwide) in 2000. The mortgage was arranged by a RightMove broker who worked for the insurer.

They weren't regulated anyway so forget it.

Jussy123

Sorry for the delay… I have been on holiday. Many thanks to everyone who replied to this query.