Mortgage Payments Protection Insurance

[Captain Haddock]

Hello, fellow beagles.

I'm new on here and have a quick query. My wife and I have had MPPI for just over ten years. Can we move this to another insurer, or is this type of insurance always held with the lender?

Any info or links to such appreciated.

[leclerc]

Re: Mortgage Payments Protection Insurance

You can move that to another lender.

[Bill-K]

Re: Mortgage Payments Protection Insurance

As Leclerc says, these policies are usually 'stand alone' policies, I believe.

If you are aware of the recent wave of claims regarding the mis-selling of such policies, however, then now may be a good time to re-evaluate your own, and check what is now available.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Ok, thanks, guys.

[Bill-K]

Re: Mortgage Payments Protection Insurance

Hope we've helped, cap'n !!!

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Hhmmm... it seems the life assurance is separate but the unemployment PPI - which we really want to move because we just know they wont pay out if anything would go wrong - is combined with the actual mortgage, or, rather, it comes out with the mortgage payments. So far, the bank has ignored my letter asking for the position on this.

Any ideas?

[Bill-K]

Re: Mortgage Payments Protection Insurance

I'm not too good on the Life Insurance/Assurance side of things, Cap'n, but my feeble understanding is that Life Assurance is a guaranteed ('Assured') sum after a set period of time - or upon prior death of the Assured. This, I believe, is the assurance that accompanies an endowment mortgage, but may not necessarily be the case here. Technically, it may be seen as a 'stand alone' policy, but may in fact be a part of the security on which the mortgage loan was made.

Life Insurance is, as I understand it - only payable upon the death of the Insured. Not usually linked to a mortgage in my experience, but obviously can be used to pay off the mortgage upon the death of the Insured.

The above may need more discussion from better peeps than myself (and there are plenty !!!)

Regarding the PPI, then this sure looks like a possible mis-selling. If it was wrapped up as a part of the mortgage agreement, then we need to see the mortgage agreement, which should clearly show how much of the mortgage loan was apportioned to the PPI. We move on from there.

The reticence of the lender to respond is looking like a tacit admission of guilt, already !!! A DSAR would elicit some data, but I have a feeling that we may need to follow a 'circuitous route' here. Do you have a copy of the original mortgage agreement, and/or any other original documentation ? In particular, anything which shows the PPI amount.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Yes, we have documentation. I will scan and post - personal details blanked, of course. Will do this later on this evening.

Thx, Bill-K

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Ok, so here we go.

At the time of setting up the mortgage we opted for Life Assurance cover, in the event of one of us popping the clogs prior to paying off mortgage. This payment is covered separate from the mortgage and can be seen as 'Mortgage Cover plan' @ £27.57 on document 1.

To the right of that (the Building and Contents are no longer held with the lender) you will see 'Mortgage Repayments Insurance', with two fluctuating figures beside it. This must be the insurance for sickness, redundancy, etc. , a payment they are still taking from us even though I have not been covered by it since I went freelance in 2006. We did address it with them then but they dodged the issue and then other, more pressing matters arrived that needed dealt with.

We have been on our feet since 2009 - no thanks to the lender, who employed some of the most vicious underhand tactics I have ever seen emanating from a bank - and are slowly filter off what we need to pay them, right back to the basics. So, we've shipped the Building & Contents elsewhere and now need to remove, at least, the repayments insurance. The trouble is, we think they are lumped in with the mortgage payments as they are not visible on the bank statements; they only other thing we pay them, as I've stated, is the Life Assurance.

Furthermore, we don't have a hard copy of the mortgage with our signatures on it. We only have an 'Offer' and 'Quotation', part of which (the latter) is attached below.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Ok, quick update.

Letter arrived today, acknowledging and confirming request to cancel the employment protection insurance. But it worded the plan differently than it was set out, calling it a 'Mortgage Repayments Cover'. I know it may seem like small potatoes, but that was too close to the 'Mortgage Cover Plan'. I had to phone up and, after a merry-go-round of answerphone menus, I got through to someone. However, they could only confirm that it was the unemployment cover had been removed but that they could not say that that figure was from then on going to be absent from the mortgage payment. To ascertain that, I was told to phone the lending division direct. Exasperated, I gave up.

Tempted to jsut see what happens at month end so I can bawl them out but I guess I should speak to the lending branch soon tomorrow,

[Bill-K]

Re: Mortgage Payments Protection Insurance

...Exasperated, I gave up.

That's probably exactly what their system is designed to make you do !!!

Just my own thoughts here. It's been years since we had a mortgage, but as I recall, your copies of the original mortgage documents may have been retained by your solicitor or conveyancer, so you may be able to access them or obtain photocopies from them.

The Mortgage Cover Plan appears to be another version of PPI, which I assume is charged at £27.57 per month as a separate item to the mortgage repayment. This covers mortgage repayment in the event of the death of either mortgagee. I expect this is a monthly premium - as opposed to a single upfront premium rolled into the mortgage loan. As such, I'm pretty sure you can cancel this any time, and take out an alternative insurance if you wish. However, I doubt if you could reclaim any of the premiums already paid on the basis of mis-selling.

The 'Mortgage Repayment Insurance' is the MPPI, I am sure. And, as I understand it, this is paid as part of the mortgage repayments. In that case, I think it will have been charged as a single upfront premium at mortgage inception. This premium will then have become part of the total loan, and attracted the same loan interest - so the monthly payments for this would actually be the monthly RE-payments of the portion of the loan which covered this premium. It may be possible to reclaim this as mis-sold insurance, but if the lender disputes this, then I think it will be difficult. Having a copy of the Insurance T&C's would help.

However, if you are just wanting to terminate this MPPI (with a view to perhaps buying cover elsewhere), then my suggestion is that you write to them (don't phone them), explaining that you tried to terminate this a while ago, as it no longer provided cover - yet they have continued charging you for it. Insist on having cancelled immediately, on having the mortgage re-scheduled to take account of the reduced repayments, and a refund of the premium repayments made since you tried to terminate it.

I daresay that you will be given a whole load of waffle as to why it is still a useful insurance, or why they "cannot" cancel it, blah, blah....and you may well find - if you continue to give them enough rope - they will effectively give you enough evidence to show that it was actually mis-sold in the first place. That should give you something to hit them with if they then continue to fob you off.

Like I said, JMHO, though.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Bill-K

The MPPI has been cancelled and, yes, it was roped in with the actual mortgage. We had a loan tied to the house which had the same agreement terms and we fought that for two years on mis-selling, but to no avail. We just want rid of them now and it looks like another one of their fixes has been squashed.

As to the Life Cover, well they're gonna lose that, too! But I'll update tomorrow on whether the MPPI has actually ben removed from the mortgage installment.

[Bill-K]

Re: Mortgage Payments Protection Insurance

Yeah, I think the life cover just ceases as soon as you stop paying the premium on it. It's 'courteous' to advise them of this, but not usually necessary. Your choice !!!

Let's hope the MPPI is cancelled properly. What they will not like having to do is re-schedule the mortgage with reduced payments from now on - but that's what needs to happen if proper cancellation is effective.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

Let's hope the MPPI is cancelled properly. What they will not like having to do is re-schedule the mortgage with reduced payments from now on - but that's what needs to happen if proper cancellation is effective.

Exactly! I don't trust them to do this so am getting back on the blower in the morning. Will update.

[Captain Haddock]

Re: Mortgage Payments Protection Insurance

So, I called them the other day and the person I spoke to said it had been cancelled. But I asked him what the new figure for the mortgage repayment would be and he rattled off a figure remarkably close to what the mortgage payment was prior to the cancellation. Foolishly, I did not write down that figure.

In any case, my wife & I are waiting to see what comes out of the bank account at month end. As to the life assurance, we are now looking at moving that.