Mis sold life insurance

Glenvernon

I have recently re-mortgaged my house and because I have been over paying I will finish it way before the original date.  They asked me about life insurance but i said I already have it but because I have been overpaying even though it is a decreasing term it is probably way over what I need.  We are currently paying £87 per month for a policy taken out in 2008.  We are both 53 now.  I checked how much we could pay for the outstanding balance of £38000 and it should be about £21 for life and critical illness for the next three years.  I phoned Aegon just to check and although we have a policy it wouldn't pay off the mortgage but would pay us £813 a month until 2028 if anything happened.  As this was many years ago I do remember the financial advisor in my house to sell me a life insurance policy ie one that pays off the balance if anything happens.  I remember him now suggesting we have this benefits policy to give one of us extra financial support if anything happened.  I didn't realise that the policy I have got doesn't pay off the mortgage.  I have contacted the advisors company and Aegon.  What do I do now?

dunstonh

What do I do now?

You wait.  It is nothing to do with Aegon. So, they will reply as such.  The adviser company will look at the file.  A 2008 sale would require a statement of demands and needs letter to have been issued to you.   That would justify the recommendations and cover off any potential alternatives.

There are scenarios where using a Family Income Benefit policy instead of a decreasing term assurance plan could make sense.   It's unconventional but if you mentioned your plan to significantly overpay the mortgage and clear it early and you were also short on your family protection but focused on cost, then a FIB could be potentially justified.  Especially if there is death in service or other life assurance plans held.
There is no financial benefit to an adviser for recommending an FIB over a DTA.   Indeed, it may well have earned them less with lower premiums.   So, you would think the file should have sufficient justification on it unless they have really messed up.

You could also check you dont have any other life assurance and you are mixing up policies.  I have seen that many times before where someone has mixed up what the different plans did.  e.g. family protection is with one provider and mortgage protection is with a different provider.

Glenvernon

Thanks. I have contacted the original company and will see what they say