American Life Policy- Advice Please

Debbie_567

Dear Members

Re:  Advice for my American Life Assurance Policy

I bought a Home Services Protection Policy with American Life with commencement date of 26 November 2003, paying £34 per month for 25 years. The policy was a combined policy for critical illness and life policy, as advised by the sales person to go for, at that time.

Eight months later (in June 2004) whilst still making monthly payments I contacted and complained to American Life that I felt I was mis-sold the policy – I didn’t need the life policy part. I also complained that the policy term was not explained properly to me.  My living circumstances at that time were also changing. I contacted American Life to reduce my policy and was told I couldn’t. I contacted the sales person I bought the policy from but was told he had left the company in March 2004.

I filed a complaint with the Financial Ombudsman Service on July 2005 who enclosed a complaint form which I completed and returned to them and correspondence continued throughout the rest of 2005 trying with the FOS about my complaint.

In September 2005 I contacted American Life to cancel my account and stated I had cancelled the £34 monthly direct debit payment. American Life (then Alco) wrote back to me in October 2005 to say they had cancelled my policy.  The FOS formally replied to me after assessing my complaint to say that they were “not persuaded that you had been given tailored advice or believed you had taken out a savings plan and am therefore unable to upheld this aspect of your complaint.” Since then I kept all documentation and filed in a cupboard for 17 years. 

In 2022, after listening to a podcast about a financial matter, I thought I should contact a regulatory body about my American Life matter and dug out my American Life paperwork again.  I contacted the FSCS who referred me to the Financial Standards Authority (FSA). I was told that the FSA began regulating financial products from December 2003 and because my product was purchased just before this date (November 2003) it does not apply.

I am now contacting this forum in the hope of putting this matter to bed if possible. The FSA and FSCS were both very helpful and pleasant but at the end of the day I feel I have no rights on this matter and no redress. Is that the case?

Essentially American Life keeps my money and that’s it. My thinking is that it is mine and is floating out there somewhere. Whilst it is a small amount I’d like to see if there are options to recover my money in any way. To add to this, American Life ceased trading in 2012, I’m told. I can provide all policy papers and documentation as proof of evidence if required.

Thanks for your help in advance. 

Best Wishes, 

Debbie

 

 

dunstonh

Eight months later (in June 2004) whilst still making monthly payments I contacted and complained to American Life that I felt I was mis-sold the policy – I didn’t need the life policy part.

That complaint was always going to fail.   The cost difference between standalone CIC and CIC with Life assurance is minimal.  Sometimes no difference at all.   Its usually considered a good idea to include it on that basis.

I also complained that the policy term was not explained properly to me.  

That is a tough ask to believe.    Buying a term assurance without knowing the term doesn't seem logical.    I suppose it is possible if you didn't read the quote, the application form, the second quote on acceptable and the cancellation rights.

 I couldn’t. I contacted the sales person I bought the policy from but was told he had left the company in March 2004.

A lot were made redundant in the lead-up to regulation.

The FOS formally replied to me after assessing my complaint to say that they were “not persuaded that you had been given tailored advice or believed you had taken out a savings plan and am therefore unable to upheld this aspect of your complaint.” Since then I kept all documentation and filed in a cupboard for 17 years. 

I believe American Life didn't operate an advice salesforce. They were order takers effectively (they did what you told them to do).  So, for the FOS to consider it missold, they would need sufficient persuading that they broke their regulatory permissions.   

As for referring to it as a savings plan, none of their documentation would have hinted at that.  So, its difficult to see how you got that impression.

In 2022, after listening to a podcast about a financial matter, I thought I should contact a regulatory body about my American Life matter and dug out my American Life paperwork again.  I contacted the FSCS who referred me to the Financial Standards Authority (FSA). I was told that the FSA began regulating financial products from December 2003 and because my product was purchased just before this date (November 2003) it does not apply.

The FSA is the Food Standards Agency.  I think you mean the FCA.   However, putting that aside, I think your info here is wrong or misremembered.

Firstly,  insurance became regulated on 14th January 2005.    Not November 2003.
Secondly, the FSCS can only consider missold advice complaints for post 14th January 2005 applications
Thirdly, the FCA don't handle consumer complaints (its not its remit) and the FSCS telling you to contact the FCA  doesn't get you anywhere.

I am now contacting this forum in the hope of putting this matter to bed if possible. The FSA and FSCS were both very helpful and pleasant but at the end of the day I feel I have no rights on this matter and no redress. Is that the case?

The matter was put to bed 6 months after the FOS decision back in 2005.      There is nothing you can do now.

Essentially American Life keeps my money and that’s it. 

That is how insurance works.  You are covered whilst you pay the premiums but if you don't suffer an insured event then the insurer keeps your money. 

Time for you to move on. Indeed, it is long past that point.

A board guide/moderator may wish to move this thread to the insurance section as its in the wrong place.

Eyeful

In November 2003 you bought a 25 year policy..

For 2 years you paid for cover, then you cancelled the policy.

For 2 years American Life took on the risk  covering you against critical illness and loss of life for a charge of £34 per month.

That was money you paid them to take on that risk.
 
 If the risk does not occur, they get to keep the monthly charge.

I cannot follow your thinking that this company is keeping any of your money.

Sandtree

Debbie_567 said:

Eight months later (in June 2004) whilst still making monthly payments I contacted and complained to American Life that I felt I was mis-sold the policy – I didn’t need the life policy part. I also complained that the policy term was not explained properly to me.  

With CIC the life aspect would have been peanuts or free... you really complaining you got something for free?

Did you mean "policy term" (ie its duration) or did you mean the policy terms and conditions? Where does the comments about a "saving plan" come in?

The law of limitations in the UK is 6 years for contract law and so the boat to do anything about it has not only sailed but done many hundred journeys since this became statute barred.

jimjames

Debbie_567 said:

Essentially American Life keeps my money and that’s it. My thinking is that it is mine and is floating out there somewhere. Whilst it is a small amount I’d like to see if there are options to recover my money in any way.  

Essentially it is no different to buying car or house insurance. You can't say at the end of the year that you didn't need to claim so you want your premium back. This is the same. You were covered while you paid, it doesn't matter that you didn't need to claim in that time but you got what you paid for.
Normally this would be linked to a mortgage, did you take one out at that time?

Debbie_567

Thanks for your reply. No, I didn’t take a mortgage out at that time. I guess I can’t link it to any account or product now as the company is closed and time has passed? 

Malthusian

Debbie_567 said:

Thanks for your reply. No, I didn’t take a mortgage out at that time. I guess I can’t link it to any account or product now as the company is closed and time has passed? 

What would be the point of linking a policy that hasn't existed for 17 years to a mortgage?

Historically some life insurance policies were linked to mortgages to benefit the lender, not the life assured. It was to ensure the lender got the money if the life assured died.

You paid for insurance for almost two years, you received insurance against death and critical illness for almost two years. You almost certainly needed the insurance. (Most people are underinsured, it had critical illness cover so it doesn't matter if you had dependents or not, and the life insurance element was virtually free.) You have lost nothing.