Mortgage life assurance discussion

thehippo_2

Thanks Dunston. Pretty much as I'd expected but just making sure I'm not being a complete idiot!

somewhatnew

Hi thehippo

You've laid an interesting question re why you were paying so much. I think dunstonh has missed the point slightly saying that prices have simply come down - whilst this is true as people are living longer you have actually become older at the same time negating and 'real' cost saving.

Are you able to supply any more info re your stent - was it in you leg or heart? At the time I suspect you took the cover and it was a good price. Friends Prov have good medical underwriters. They would have been looking for associated cardiovascular risks... have you had a heart attack or angina, have you given up smoking, have you lost some weight, is there are family history of strokes/heart attack/diabeties etc... Are you on medication now? possibly a statin and blood pressure medication every day whereas previously you wernt before? do you take asprin? I suspect as I would, Lifesearch probably took all the information from you upfront rather than just said 'sure we can do it cheaper' and made an educated desicion as to what could save you money. With an extended period of blood pressure and cholesterol control, and if other factors improve in your favour it is always worth reviewing your polcies every 2/3 years or whenever your circumstances change to make sure you have the correct cover at the right price.

Regards

eltonjazz

I would appreciate any advice on the following problem.

In 2001 my wife and I took out a small mortgage to buy our home. With this mortgage we took out a Mortgage cover plan and essential protection plan, to give us a bit of extra protection whilst paying it off. We eventually paid the mortgage off in September 2006. The problem is, our lender has still been taking the premium for the Mortgage cover plan, since this time, even thought we haven't had a mortgage for nearly 4 years!! We stupidly though this was a payment for our buildings insurance, and this has only come to light as I am changing our buildings insurance, and had to check the premium we were paying. Does anyone think we could get a refund on this overpayment, as it is a sizeable amount of money.

We are contacting our bank ASAP but any advice from the forum would be very much appreciated, to give us at least a bit of info' to start with.

Many thanks in advance.

dunstonh

The problem is, our lender has still been taking the premium for the Mortgage cover plan, since this time, even thought we haven't had a mortgage for nearly 4 years!

The policy isnt run by your lender. Its run by the insurance company. The lender has no authorisation to cancel your life assurance.

Does anyone think we could get a refund on this overpayment, as it is a sizeable amount of money.

As it's life assurance its unlikely as life assurance isnt directly linked to the mortgage (i.e. if you died in the last 4 years it would have paid out). A lot of people still keep their life assurance running after they pay the mortgage off to provide a bit more family protection.

You would be totally reliant on the goodwill of the bank.

eltonjazz

Thank you for the reply DUNSTONH,

So what you are basically saying is that even though what we have is called a Mortgage cover plan and Essential Protection Plan, it will continue to function just like a Joint Life Insurance policy, as long as we carry on paying the premiums and as long as we want to continue paying them?

Also, the initial amount we were covered for was £44,485, which was the actual mortgage. Does this mean that if either my Wife or I should die whilst still continuing to pay these premiums, this Life cover would still be paid out, even though it was initially to cover a mortgage, which we obviously no longer have?

Thank you again for your advice and information, which is very much appreciated and valued.:)

OshayAway

That's Correct.

dunstonh

So what you are basically saying is that even though what we have is called a Mortgage cover plan and Essential Protection Plan, it will continue to function just like a Joint Life Insurance policy, as long as we carry on paying the premiums and as long as we want to continue paying them?

That is just a marketing name. The generic name is decreasing term assurance. You often use DTA for non mortgage issues.

Also, the initial amount we were covered for was £44,485, which was the actual mortgage. Does this mean that if either my Wife or I should die whilst still continuing to pay these premiums, this Life cover would still be paid out, even though it was initially to cover a mortgage, which we obviously no longer have?

Correct. However, the sum assured goes down every year (as it would more or less follow the mortgage balance had it still existed). The mortgage is not required to have this policy.

eltonjazz

Many thanks again DUNSTONH,

Your explanations have certainly cleared up our many mis-understandings on this issue. We have decided to cancel this policy and look at our life insurance/general insurance issues all over again. This is definitely time for an insurance "spring clean" exercise. We actually thought we'd been paying for cover which wouldn't have paid out. What a relief!!

Many thanks again for your input, we are both much happier now, thanks to your advice/Info'.

Kind regards,

Alan & Lorraine

davos119

@eltonjazz

If it's any consolation, you're not alone in this. I just registered on the forum and spent 10 minutes composing a post asking almost the exact same question. Then I read your exchange with dunstonh and had to hit delete...

Only in my case the mistake was even worse because when we sold our house we did contact our IFA to ask them to reduce the level of cover, which they duly did.

But I, being the idiot I am, didn't cancel the direct debit on the old policy, so instead of reducing our premiums, I've actually been paying for more life insurance, not less, as a result of ditching the mortgage!

I hope my idiocy makes you feel better about your small oversight.

I have contacted the IFA in the vain hope that L&G did actually cancel the old policy (which to be fair, we thought they would do when we set up the new one) and have been claiming the money erroneously.

I'm not optimistic though. I fully expect that their response will be that the policy existed and had we been hit by a bus, it would have paid out, so no refund.

Lesson learned.

Edit: and I've just now realised that your post is well over a year old, so my response was probably pointless. Sod it though, I'm leaving it here.