Mortgage company forced us to take out life insurance

a2ndlife

When we remortgaged our house it was at the height of the PPI mis-selling period so we refused to take it out, but our mortgage company insisted we take out joint life insurance or we wouldn’t get the mortgage. Were they allowed to do this?

Inbetweeners

So was a good 10 years ago and you are just asking now?

Yes, they could attach said condition. 

Mark_d

Sometimes you get pushy mortgage salesmen, or at least you used to.  Did the mortgage T&C state that it is a requirement for you to have life assurance?  I've always explained that I have ample life cover through my employer and through my pension arrangement, so that's why I always refuse to buy a life assurance policy

dunstonh

When we remortgaged our house it was at the height of the PPI mis-selling period so we refused to take it out, but our mortgage company insisted we take out joint life insurance or we wouldn’t get the mortgage. Were they allowed to do this?

Yes they were.  They were also allowed to do it for PPI too and some deals at the time required it.  

Until around the mid to late 1990s, life assurance was a condition of borrowing with most lenders.

a2ndlife

Thanks for the replies. It was 14 years ago so is just finishing which is why I was thinking about it, but I’ll check the paperwork and see if it was compulsory xx

dunstonh

It was 14 years ago so is just finishing which is why I was thinking about it, but I’ll check the paperwork and see if it was compulsory xx

Only some very niche lenders or commercial borrowing insisted on life assurance in 2010.  So, it is unlikely it was compulsory at that time.

However, unless you have documentary evidence, any complaint will fail as it's your word against theirs. In all probability, most people would take out life assurance to cover a mortgage, and you would be arguing the opposite.  So, it would then fall back to a suitability check. i.e. did you need it from a financial point of view.   And seeing as it was joint and most of the population is underinsured, and taking out life insurance to cover debts is normal, it would be rejected.