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Income protection

Hello members I was looking for some help on an issue. 
In 2000 my father took an income protection policy with his mortgage for a £240 a month pay out after a 56 week deferment up until his 65th birthday which was 2020. In November 2007 he had a major stroke at work and lost his ability to speak and use of his right side. We did not know about the policy at this time. In June 2009 my mom sold the property so she could buy another property outright and received some documents about the policy and called and cancelled the policy as she didn’t want the payments to effect my fathers benefits. He was awarded disability living allowance as he was severely disabled and would never be able to work and it had taken her a long time to sort the benefits out. The policy was cancelled and as a gesture of good will they refunded her 2 years of payments. 
My father died September last year and as an executive of his will I have been dealt with his affairs as my mom now has cancer and I found the policy. I have spoken to my mom regarding it and she said she was scared that if she claimed she would have lost all of her benefits for my father. 
My question is my father was given a non mean tested benefit so surely the payments from the policy would have not counted? 
I have spoken to the provider explaining that I am unhappy as I feel that if they had been awarded the payment they would not have had to sell the family home.
please can someone just advise if this is something I can complain about and where do I stand legally with it. 
Thank you for taking the time to read this.
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Comments

  • DullGreyGuy
    DullGreyGuy Posts: 15,568 Forumite
    10,000 Posts Second Anniversary Name Dropper
    What are you going to complain about? 

    Using "you" in the collective term, you asked for them to cancel the policy, they cancelled the policy as requested and as a gesture of goodwill refunded some premiums. 

    You were dealing with the insurer directly it will be on a non-advised basis and therefore they cannot advise you to continue to hold the product and make a claim instead. Similarly they arent experts on benefits and so would doubly be unable to advise your mother on if benefits are or arent means tested to challenge her position that claiming would be problematic. 

    Your other problem is the law of limitations is 6 years so given you are saying the problem occurred in 2009 you are 10 years too late to do anything about it. 

    The time to deal with it was back in 2007-2009 whilst your mum was trying to deal with all of this. 
  • Thank you for your help. I didn’t explain myself well but my point is my dad didn’t cancel the policy my mom did and she doesn’t have power of attorney. I didn’t think you could cancel other peoples policies without relevant documentation. 

    As for the time barring I thought that it was 6 years or 3 years after you found the problem?

    I really appreciate your reply too
  • DullGreyGuy
    DullGreyGuy Posts: 15,568 Forumite
    10,000 Posts Second Anniversary Name Dropper
    Thank you for your help. I didn’t explain myself well but my point is my dad didn’t cancel the policy my mom did and she doesn’t have power of attorney. I didn’t think you could cancel other peoples policies without relevant documentation. 

    As for the time barring I thought that it was 6 years or 3 years after you found the problem?

    I really appreciate your reply too
    Insurers are often required to be practical, especially for those policies covering when the policyholder is seriously ill. There would be outcries if insurers required spouses etc to get a deputyship having not gotten a PoA on their partner whilst they were competent to consent to one and refuse to settle hospital bills or payout on terminal illness cover etc because the insured is too ill to deal with the matter on the phone etc. 

    For things like Home insurance, they tend to be more rigid because it's a much rarer event for them. 

    In certain circumstances the limitation of liability can be extended until 3 years after the insured should have reasonably have known there were grounds for complaint. 

    So how competent was your father after his stroke? You say he couldn't speak but motor skills and brain function can be very differently impacted. Did your mother become the sole decision maker or was he still involved? Did she discuss the not claiming, house move and cancelling the policy with him? Was he still able to see bank statements to see the premiums weren't being taken? If he was incompetent did she receive official deputyship or deal with it unofficially as his wife?


    You are verging on ropy grounds here though... you will be basically have to say your mother acted against your father when instructing them to cancel the policy or he was incapable of decision making, which is effectively saying she abused him. 


    Its not a direct parallel but in my world of Motor insurance we had more than one case where an under 16 year old kid took their parents car and had an accident. If the car was taken without consent (ie stolen) then we cover the damage to both vehicles and whilst we can attempt recovery from the driver we dont sue many 15 year olds. If however they consented to them taking the car we dont cover the damage to their vehicle but we do have to cover the third party damages but then can reclaim that money from our policyholder. 

    It's no surprise they tell us it was without consent but when asked for the crime reference number for the theft they haven't reported it to the police. We would assume it was by consent unless we had a police report which we buy based on the crime reference number. 

    I've not seen an identical scenario to yours but I have seem something similar where a person alleged someone else had taken advantage of a vulnerable person and again they needed to report it to the police before the firm would look at it. 
  • kingstreet
    kingstreet Posts: 39,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Would the insurer countenance a retrospective claim from the date of the stroke which is what would have happened if the existence of the policy had been known?

    Had the benefit been in course of payment, the policy wouldn't have been cancelled in error.

    If so, would it be prepared to settle the claim upto the point it would have expired at 65 while deducting the cost of the unpaid premiums, leaving a net benefit to the estate? That's assuming premiums would have to continue to be paid even during the time the benefit was payable. Waiver of premium was pretty common on permanent health insurance, for example.


    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Would the insurer countenance a retrospective claim from the date of the stroke which is what would have happened if the existence of the policy had been known?

    Had the benefit been in course of payment, the policy wouldn't have been cancelled in error.

    If so, would it be prepared to settle the claim upto the point it would have expired at 65 while deducting the cost of the unpaid premiums, leaving a net benefit to the estate? That's assuming premiums would have to continue to be paid even during the time the benefit was payable. Waiver of premium was pretty common on permanent health insurance, for example.


    Thank you for replying.

    The premiums would have been stopped after the claim. I just feel that if the policy paid out they wouldn’t have had to sell their home. My dad had a major stroke and lost his communication skills and use of his complete right side. He worked all his life and he took out financial protection that my mom was unaware of. I feel that the policy was null and void from the start if that makes sense? What is the point of taking a policy out to cover you for these things and when it comes to it they allowed for it to be cancelled? 
  • DullGreyGuy
    DullGreyGuy Posts: 15,568 Forumite
    10,000 Posts Second Anniversary Name Dropper
    Lucielooby said:
    What is the point of taking a policy out to cover you for these things and when it comes to it they allowed for it to be cancelled? 
    They didnt cancel it, you did. The reason for cancelling it may have been misguided but as already said, no direct insurer offers an advisory service, they can only give you the facts and you have to make your own decision. 

    For "protection insurance" an insurer themselves can only cancel for non-payment or false disclosure unlike general insurance where a policy is only 12 months long and can be cancelled mid term by either party.
  • kingstreet
    kingstreet Posts: 39,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Would the insurer countenance a retrospective claim from the date of the stroke which is what would have happened if the existence of the policy had been known?

    Had the benefit been in course of payment, the policy wouldn't have been cancelled in error.

    If so, would it be prepared to settle the claim upto the point it would have expired at 65 while deducting the cost of the unpaid premiums, leaving a net benefit to the estate? That's assuming premiums would have to continue to be paid even during the time the benefit was payable. Waiver of premium was pretty common on permanent health insurance, for example.


    Thank you for replying.

    The premiums would have been stopped after the claim. I just feel that if the policy paid out they wouldn’t have had to sell their home. My dad had a major stroke and lost his communication skills and use of his complete right side. He worked all his life and he took out financial protection that my mom was unaware of. I feel that the policy was null and void from the start if that makes sense? What is the point of taking a policy out to cover you for these things and when it comes to it they allowed for it to be cancelled? 
    Forgive me being blunt, but I think that's a little unfair. Did you or anyone else tell the insurer about your father's condition; or attempt to make a claim? If not, how could the insurer do anything other than follow the instructions it was given at the time? You seem to want the insurer to have the 20:20 hindsight you wish you had.

    When your mother communicated the cancellation, did she mention his condition; or was it simply a call/letter with no reason for the cancellation?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • sheramber
    sheramber Posts: 20,914 Forumite
    Tenth Anniversary 10,000 Posts I've been Money Tipped! Name Dropper
    Your mother cancelled the policy because she did not want the money.

    She made that decision, not the insurance company.

    she was aware she could claim the payments but chose not to.

    It wasn’t a case of not knowing she could get the money.

    I don’t see what you can complain about. 

    It is not the insurer’s job to enquire / advise  a course of action. 
  • Would the insurer countenance a retrospective claim from the date of the stroke which is what would have happened if the existence of the policy had been known?

    Had the benefit been in course of payment, the policy wouldn't have been cancelled in error.

    If so, would it be prepared to settle the claim upto the point it would have expired at 65 while deducting the cost of the unpaid premiums, leaving a net benefit to the estate? That's assuming premiums would have to continue to be paid even during the time the benefit was payable. Waiver of premium was pretty common on permanent health insurance, for example.


    Thank you for replying.

    The premiums would have been stopped after the claim. I just feel that if the policy paid out they wouldn’t have had to sell their home. My dad had a major stroke and lost his communication skills and use of his complete right side. He worked all his life and he took out financial protection that my mom was unaware of. I feel that the policy was null and void from the start if that makes sense? What is the point of taking a policy out to cover you for these things and when it comes to it they allowed for it to be cancelled? 
    Forgive me being blunt, but I think that's a little unfair. Did you or anyone else tell the insurer about your father's condition; or attempt to make a claim? If not, how could the insurer do anything other than follow the instructions it was given at the time? You seem to want the insurer to have the 20:20 hindsight you wish you had.

    When your mother communicated the cancellation, did she mention his condition; or was it simply a call/letter with no reason for the cancellation?
    She told them he had suffered a major stroke and that she didn’t want to mess up the benefits he had been granted. She was petrified of getting into trouble with anyone. This is noted with the insurers as they read it out to me. My point is the £240 payment a month would not have interfered with a non means tested benefit. I know it sounds ridiculous but surely this claim should have been plausible? Im sure if she had known that it wouldn’t have interfered with my father’s benefit she would have claimed. That was the point of the policy. 
  • Aretnap
    Aretnap Posts: 5,516 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 7 February at 7:51AM
    The problem is that insurance call center staff aren't qualified to give financial advice on insurance products - let alone about entitlement to benefits - and they will be specifically instructed not to try to do so. Imagine if the staff member confidently assured her "no of course it won't affect your benefits" and then it turned out that it did - would the industry be liable for her lost benefits?

    The absolute maximum that they might have been able to do would have been to ask if she was sure that she wanted to cancel and not claim, or ask whether she wanted to seek advice on the benefit situation from eg Citizens Advice first. But if she insisted that she wanted to cancel then they would really have had no choice but to acquiesce, no matter how misguided her reasoning sounded.
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