Question on insurances.
I already did a quick search on these forums and found a similar situation (the mortgage was even with the same bank Northern Rock). My father has a mortgage and both home and life insurance. All packaged by the financial adviser who helped him get the mortgage back in 2004. I actually do belief my father has been miss-sold, as he doesn't even know what it is that he is buying in to. The reply on other post suggest otherwise, and that some lenders may insist on life insurance policies when taking out a mortgage.
This is what puzzles me, I always thought that the bank will always have first charge over the mortgage should the worst ever happen, so their capital was always 'safe', assuming the house doesn't become worthless overnight. Then why would life insurance be needed.
The reason I belief he was miss-sold was because over the years he always believed that life insurance was compulsory, he was led to belief that this was a legal requirement, same as home insurance (although I am not sure if even that is legally required, or that banks just insist on it). This was the only reason he would have taken it up in the first place. His mortgage is with another bank at the moment, and I called them up last week and asked them if it was needed, and they said that it wasn't.
My question is do I have a case. Over the years he has paid over £6500 for this policy. To be honest, I am not looking for any compensation but just want to know to clear my mind. Since I told him that it wasn't a requirement to the mortgage he wanted to cut it off completely. I haven' actually dealt with life insurance before and I don't have any documents at all in relation to this policy. Should they have not been sending annual updates of the policy with the price increase? We saw the increased money going out of the bank but no supporting paperwork. How hard is it to cancel the policy, would it likely be a fixed annual contract or rolling so that he can cancel it any time.
I do understand generally the pros and cons of life insurance. My father is in his mid 50s now and his mortgage should end in 7 years or so, or sooner should I help him repay some of the money. I think that the next re-mortgage when his current term ends I would get him would be the last time for his current home. My main concern is that if he does cut off his life insurance, would banks actually see him as a higher risk and be more reluctant to give him a re-mortgage. I remember in 2009 when I got him his current deal I did not mention the life insurance at all, and the mortgage documents do not mention it (I think) either. Either way even if he has to stay on the more expensive SVR, it would still be cheaper to get off the life insurance (he doesn't like it at all).
Also about home insurance, I had a quick glance on the documents and found that he has been taking up emergency and legal cover as well. The mortgage bank he has right now did say that home insurance was needed, but they were vague on what kind of cover they want. Can he do away with the extras, as he doesn't think he needs them.
Thanks in advance.
I already did a quick search on these forums and found a similar situation (the mortgage was even with the same bank Northern Rock). My father has a mortgage and both home and life insurance. All packaged by the financial adviser who helped him get the mortgage back in 2004. I actually do belief my father has been miss-sold, as he doesn't even know what it is that he is buying in to. The reply on other post suggest otherwise, and that some lenders may insist on life insurance policies when taking out a mortgage.
This is what puzzles me, I always thought that the bank will always have first charge over the mortgage should the worst ever happen, so their capital was always 'safe', assuming the house doesn't become worthless overnight. Then why would life insurance be needed.
The reason I belief he was miss-sold was because over the years he always believed that life insurance was compulsory, he was led to belief that this was a legal requirement, same as home insurance (although I am not sure if even that is legally required, or that banks just insist on it). This was the only reason he would have taken it up in the first place. His mortgage is with another bank at the moment, and I called them up last week and asked them if it was needed, and they said that it wasn't.
My question is do I have a case. Over the years he has paid over £6500 for this policy. To be honest, I am not looking for any compensation but just want to know to clear my mind. Since I told him that it wasn't a requirement to the mortgage he wanted to cut it off completely. I haven' actually dealt with life insurance before and I don't have any documents at all in relation to this policy. Should they have not been sending annual updates of the policy with the price increase? We saw the increased money going out of the bank but no supporting paperwork. How hard is it to cancel the policy, would it likely be a fixed annual contract or rolling so that he can cancel it any time.
I do understand generally the pros and cons of life insurance. My father is in his mid 50s now and his mortgage should end in 7 years or so, or sooner should I help him repay some of the money. I think that the next re-mortgage when his current term ends I would get him would be the last time for his current home. My main concern is that if he does cut off his life insurance, would banks actually see him as a higher risk and be more reluctant to give him a re-mortgage. I remember in 2009 when I got him his current deal I did not mention the life insurance at all, and the mortgage documents do not mention it (I think) either. Either way even if he has to stay on the more expensive SVR, it would still be cheaper to get off the life insurance (he doesn't like it at all).
Also about home insurance, I had a quick glance on the documents and found that he has been taking up emergency and legal cover as well. The mortgage bank he has right now did say that home insurance was needed, but they were vague on what kind of cover they want. Can he do away with the extras, as he doesn't think he needs them.
Thanks in advance.