Any comeback for being oversold insurance policies?

kdb14

Hi All,

I was hoping to get some opinions and feedback on the following.

My partner was sold life assurance in 2004 at 60 euro a month to secure a mortgage and in 2005 was advised that he wasn't properly covered and then was sold another policy to make up the shortfall, this policy was 130 euro per month. So in effect he was been paying 190 euro a month since 2005 for life assurance 200k and serious illness 100k x 2.

They were identical policies expect for the time, (1st policy was for 20 years and 2nd policy was for 35 years). The first policy was never cancelled so he was insured for the same thing twice- only difference being length of time. This was through a big insurance broker and he has had 2-3 financial reviews since then and the issue of the two policies were never brought up. The 60 euro a month policy wasn't even mentioned in the latest financial review.

After being questioned recently, the broker has said that they can't see why he has the two policies and that they will investigate.

We're just curious to know if he would have any case or comeback if it turns out that it was simply they never cancelled the original policy on his behalf.

Any input, advice is much appreciated!

Thanks

P.S He also was sold an income protection policy approx 200 a month which he has recently discovered that he doesn't need because he has good cover through work- almost identical. This broker had been recommended by the union which is why he kinda went along with their expertise and advice.

All of these policies were sold to a single guy with no kids, it just seems quite excessive.

coylemj

The first think he needs to do is tell the union to stop referring their members to that broker. Clearly the broker is more interested in commission than the actual requirements of the clients the union sends to him.

Your partner should immediately stop paying the income protection policy if he feels that his employer's sickness and disability scheme will provide him with an adequate safety net if he cannot work because of long term illness. There are no accrued benefits with such a policy so there is absolutely no reason to continue paying the premium if he doesn't need the cover.

On mortgage protection, he can shop around on the web and get a quote based on the current balance and time remaining on his mortgage. He doesn't have to keep paying the current premiums and to be honest, I think he'd better to terminate all policies that were taken out via that broker. He will just need to make sure that he has unbroken cover with the mortgage protection policy so he should not stop paying for the current policy until the new one is in place.

You haven't named the broker or the trade union (and please don't) so it's probably safe for me to say that I suspect that there may be too cosy a relationship between the two of them. Why would a trade union recommend one broker over another if they are all agents for the same set of insurance companies?

Can he reclaim some of the money he's paid out? Probably not, unless he can show that he had too much mortgage protection and that in the event that he died, the payout would have been less than the cover he was paying for because he duplicated his cover.

Liam D Ferguson

From what you've written, I think he may have grounds for a formal complaint. The life insurance one could be tricky. To cancel a life insurance policy requires his signature so I could see that in the event of a complaint, the broker could claim that it was explained to him that he should cancel the original policy.

That said, he should still put the question to the broker to ask the broker to explain (also in writing) why he had a couple of financial reviews with no mention of the two policies.

The Income Protection is easier. If he is already covered comprehensively for Income Protection in a workplace scheme, then any private policy is wasted money as he can't insure the same income twice. He should ask the broker (again in writing) why he was sold a private policy when he was already covered. The only possible defense of this is that he told the broker he had no cover when he took out the policy. Could this be possible?