Life Assurance not PPI?

[Willow1969]

I'm not sure if anyone can help me, I've had a claim in for mis sold ppi regarding a loan my mother took out to start a business about 15 years ago.The loan was for 15,500, taken out over a period of 60 months. The repayments were made each month from her business account & whilst the HSBC initially couldn't find any evidence of the loan due to the time scales involved, we managed to track down statements from this period to verify this, including when the loan was deposited into the account.
My mother clearly remembers being told that it was a condition of the loan than she take out insurance, despite the fact that my father had a joint life ins policy (with critical illness cover).


The insurance was paid from her personal account (Yorkshire Bank), again, statements submitted for this period clearly state 'Midland/HSBC ins' for the amount of £23.96 per month.
We've just had a letter back from the HSBC stating that the insurance does not relate to PPI, but a Life Assurance & critical illness cover.
I was led to believe that any insurance sold as an add on to cover repayments would be a valid claim, particularly as the policy was sold when my mother already had an existing joint policy & was told that it was a condition of the loan, & also, the duration of the insurance payments is the same for the loan repayments, 60 months.


So I'm unsure of what to do next, do I ask to see documentation supporting their claim...original contract etc?
I'm literally shooting in the dark here so any advice would be really greatly appreciated.

Many thanks.

[des8]

Re: Life Assurance not PPI?

Who were the beneficiaries named on the joint policy?
Was the bank aware of that policy?
Was it possible to change the named beneficiaries on that policy?
If so, was the bank given the opportunity to have themselves named as irrevocable beneficiaries on that pre existing policy?

It is not illegal for banks to refuse a loan if the borrower declines to effect PPI or life cover.
What gives rise to the possibility of a claim is including the insurance without informing the borrower, or mis-selling an unsuitable policy.

[Turboman]

Re: Life Assurance not PPI?

Try Googling this Phrase

"is life assurance cover and critical insurance the same as ppi"

Quite a lot on Martin's MSE site---but I don't know if its correct personnally

[Snoopy1948]

Re: Life Assurance not PPI?

"The insurance was paid from her personal account (Yorkshire Bank), again, statements submitted for this period clearly state 'Midland/HSBC ins' for the amount of £23.96 per month.
We've just had a letter back from the HSBC stating that the insurance does not relate to PPI, but a Life Assurance & critical illness cover.
I was led to believe that any insurance sold as an add on to cover repayments would be a valid claim, particularly as the policy was sold when my mother already had an existing joint policy & was told that it was a condition of the loan, & also, the duration of the insurance payments is the same for the loan repayments, 60 months"

I would say that you may have a valid claim based on the following :

* Your mother maintains that the loan was conditional upon their insurance being selected. I have seen an identical example of this happening before.
Clearly that was a commission based promotion and in the interests of the bank and not your mother. Therefore pressure may have been applied.
* You are stating that your mother has similar cover elsewhere. Therefore the HSBC cover sold may not have been sold with due relevance to the customers wishes or requirements. Simply put, did your mother have a genuine need for the cover? It seems not.
* Was your mother given clear opportunity to arrange such cover, if she felt fit, elsewhere at a more competitive rate? It seems not.

Although the product in question is not PPI, it is the mis-selling that comes under scrutiny.

I suggest all you need here is boldness to push these points home. Personally, I would fight that one for all its worth!

[des8]

Re: Life Assurance not PPI?

Whilst agreeing that mis-selling is the way to go (see Post 2) the OP needs to investigate further the circumstances.

Firstly Life Assurance and Critical Illness Cover are separate policies.
So one has to ask ;What type of life policy was already in existence?
Who were the beneficiaries named on the existing Life policy?
Were those beneficiaries irrevocable?
Could the bank be added as beneficiaries to the policy?
In other words : Was that policy suitable in all respects for the borrower in regards to the new loan?
If not the bank would be correct in strongly advising further cover be effected
Presumably the new policy sold was a decreasing term policy, designed to pay off the loan in event of death.

CIC insurance is nothing like PPI
CIC pays a lump sum in the event of critical illness, whereas PPI only pays monthly amount for a comparatively short period.

Did the existing policies have sufficient leeway to cover this additional loan?
Life policies & CIC are normally taken out to cover specific situations eg cover mortgage, or provide an income at a particular level for dependants. If they are then used to cover a further loan, their original aim is then adversely affected, so a bank could
advise that it would be appropriate to disregard existing policies.

When the loan was taken out it would have been good practice to provide documentation detailing the discussions with the bank & setting out the reasons for the advice to take out new policies. Was such documentation ever received, and if so is it still extant?