Missold life insurance?

ftb92 · 20 August 2019 at 5:55PM

Hi,

4.5 years ago my partner and I got a mortgage for our house via a mortgage broker. At the time we were quite naive about the whole process and were told by the mortgage broker that we must have life insurance in order to get a mortgage (I have an email to prove this) so we got life insurance via the broker too. I have since read our mortgage terms (a little too late, I know) which states that life insurance is advised but not essential for our mortgage.

My question is: have we been missold this life insurance? If so, how do I go about complaining about this? Would it be via the mortgage broker company or via the life insurance company? If I do have a case, can we reclaim what we have paid for the last 4.5 years?

TIA

Weighty1 · 20 August 2019 at 6:00PM

It doesn't sound like a missale, although it has been a bit disingenuously positioned if you've got an email saying it MUST be taken.

A missale is typically where there is no financial need for a product, if for example you were taking the mortgage on your own and had no dependents to leave the property to. Since you took the property on with a partner there is a need there.

In this instance I'd recommend putting a complaint in with the broker firm in the first instance.

MH1927 · 20 August 2019 at 7:22PM

Was the purchase of Life Insurance a requirement of the Broker to receive free mortgage advice?

Cross subsidy deals are allowed and not considered a mis sale by the FOS

BoGoF · 20 August 2019 at 7:32PM

So if either of you had the misfortune to die in the last 4.5 years you wouldn't be making a claim seeing as it was missold?

Unless you are immortal it's hard to see why you think it was missold.

POPPYOSCAR · 20 August 2019 at 7:41PM

BoGoF wrote: »

So if either of you had the misfortune to die in the last 4.5 years you wouldn't be making a claim seeing as it was missold?

Unless you are immortal it's hard to see why you think it was missold.

I echo this.

Having life insurance before my brother became ill and then dying a few years later has allowed my SIL to keep the roof over her head and that of her children.

csgohan4 · 20 August 2019 at 7:59PM

Insurance is a scam when you don't need to use t

SonOf · 20 August 2019 at 9:26PM

At the time we were quite naive about the whole process and were told by the mortgage broker that we must have life insurance in order to get a mortgage (I have an email to prove this) so we got life insurance via the broker too.

1 - It is normal to buy life assurance to cover your mortgage. So, the transaction is not unusual or bad
2 - many mortgage brokers have the requirement to buy insurance via them to allow them to offer free mortgage advice. That model is allowed as long as the insurance is suitable.

So, what you describe could be a potential missale in terms of misrepresentation. It could be a misunderstanding too. You do have a financial need for life assurance. So, the adviser could be referencing your financial need rather than the lender needing it. Or it could be that the broker needed it to give you free mortgage advice.

Whatever it is, you need life assurance. So, there isnt really an issue here.

ftb92 · 20 August 2019 at 11:22PM

Thanks for the replies. We would have always got life insurance but wouldn’t have gone through the mortgage broker if we realised we didn’t have to & therefore would have probably got it a lot cheaper than what we have been paying.

Lesson learnt!

sal_III · 21 August 2019 at 10:09AM

ftb92 wrote: »

Thanks for the replies. We would have always got life insurance but wouldn’t have gone through the mortgage broker if we realised we didn’t have to & therefore would have probably got it a lot cheaper than what we have been paying.

Lesson learnt!

Have you actually checked the numbers, or just assume you could have gotten the same level of cover and service much cheaper on your own?

If you would have taken a life insurance regardless, why didn't you say to the broker that you already have or will arrange it yourself?

Like others have said it was probably a condition to take it through the broker as part of the no fee mortgage advice.

Takmon · 21 August 2019 at 1:01PM

ftb92 wrote: »

Thanks for the replies. We would have always got life insurance but wouldn’t have gone through the mortgage broker if we realised we didn’t have to & therefore would have probably got it a lot cheaper than what we have been paying.

Lesson learnt!

Ok well if this is true then at the time you must have looked elsewhere for insurance and found out how much it would cost compared to getting it with the broker.
So when you mentioned to the broker that is was cheaper elsewhere what did they say?

If you didn't look elsewhere at the time then don't kid yourself because if you didn't even get a quote elsewhere you wouldn't have actually bought it elsewhere.

Missold life insurance?

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