cancelled life insurance policy with broker do I have to take new policy?

pipred84

Hi, hoping to get some advice please! In November 2019 my partner and I bought our home and arranged the mortgage through a broker. They advised us on different polices and we took out life iife/critical illness insurance with Zurich at £59 which the broker arranged. There was a bit of back and forth with my gp on getting medical history and it went on for several months. After they finally got my medical report and document from Zurich in June the price was now £93. I rang to query and they said they didn't really know why it had increased. I asked could I cancel as this was more than I could afford and he said no problem. The policy was cancelled and I got a new policy with Royal London no problems. The broker rang me from original mortgage and said did i know that Zurich had been cancelled. I explained to him the situation and told him I had new policy myself for £60 and he said fair enough and he would have to refund original insurance company £1500. I explained we didn't know that and he said don't worry about it. Next few days he sent an email saying he'd found a new policy, which  I hadn't asked him to do. Do I have to take the new policy with the broker? No premium was paid for original policy from Nov to June 2020. Any advice much appreciated! The broker is attached to St James's Place wealth management. Hope this makes sense! Thank you

Cscott139

No, you can arrange the insurance anyway you like. Which insurer is he recommending now as they should justify why its in your best interests to cancel your current and to change a new one. Ultimately, the decision is your either way.

ACG

Some companies ask you to sign a document that says if you cancel within a certain period, you are liable for the commission clawback. If you signed one of those you could be liable for the clawback and taking out a new policy may negate that. 

If you did not, then you are free to do what you like. 

Old_Lifer

If  I understand your post correctly the situation was as  follows:

1)   You submitted  a proposal for a  policy in November 2019 having had  a quotation  of £59.  The quotation would have been a standard quotation  assuming acceptance  on ordinary  rates.

2)   After months of waiting for medical information,  the Life Office was finally able to offer you a policy for £93.  You would have needed  to accept the terms offered before the policy could commence. 

3)    Did you immediately reject the terms offered ?    Alternatively,  did you accept  the terms offered  by arranging to pay the premiums  and then  decide later that the policy was too expensive ? 

dunstonh

I had new policy myself for £60 and he said fair enough and he would have to refund original insurance company £1500.

Unless you signed a fee agreement for commission offset against a fee, that is his problem not yours.  The consumer regulations act 2015 made it clear that you cannot be responsible for costs in a contract that you are not party to.    You would need a contract with the broker if you are liable.

The broker is attached to St James's Place wealth management. 

You should never use tied sales reps.  They are typically more expensive and very limited in choice.

 The policy was cancelled and I got a new policy with Royal London no problems. 

Did you declare the premium rating on the Zurich plan to Royal London?     For a premium to go from £59 to £93 after medical underwriting suggests a serious concern about the information supplied.   You would pretty much expect all insurers to have some rating in that case.  Although the amounts could vary.

ACG

dunstonh said:

I had new policy myself for £60 and he said fair enough and he would have to refund original insurance company £1500.

Unless you signed a fee agreement for commission offset against a fee, that is his problem not yours.  The consumer regulations act 2015 made it clear that you cannot be responsible for costs in a contract that you are not party to.    You would need a contract with the broker if you are liable.

The broker is attached to St James's Place wealth management. 

You should never use tied sales reps.  They are typically more expensive and very limited in choice.

 The policy was cancelled and I got a new policy with Royal London no problems. 

Did you declare the premium rating on the Zurich plan to Royal London?     For a premium to go from £59 to £93 after medical underwriting suggests a serious concern about the information supplied.   You would pretty much expect all insurers to have some rating in that case.  Although the amounts could vary.

In the main I do agree with the last point, but I have seem cases where 6 insurers refused to offer cover and one put on a 50% loading. There are always exceptions but it is the one and only time I have seen such a difference.