taking out life cover with a mortgage - legalities

[scotal]

Very very few mortgages will insist on life cover.

Even fewer will insist on a prescribed provider.

Who's the lender (PM if you wish)

Proscribe...tut tut. Prescribe

Edited by scotal on Tuesday 21st April 11:16

[Ungarsee]

In the old days yes, nowadays I am pretty sure it is no. It has been a while since I was directly involved in mortgage sales but as far as I was aware the introduction of ICOB (Insurance Conduct of Business) and MCOB (Mortgage Conduct of Business) prevented this. What they will have to do is strongly advise you to take out cover as a duty of care but it is normally left up to you whether or not you need it.

To make sure for certain I would suggest having a butchers at the FSA website

[m4tt]

They can stipulate that cover is in place, its not usually done on Residential Mortgages as it's more hassle than its worth, quite common with commercial lending.

I'm sure than they cannot stipulate who its provided by, just the level of cover etc.

From you other posts I thought you were in the Financial Services industry, what is it you do if you don't mind my prying?

[Tiggsy]

can they - maybe, but I've not heard of any ever bothering to check. Can they force a specific provider...no.

ultimately, what do they care? a dead borrower is just a nice easy repossession! they are more worried about a living borrow with no money

Edited by Tiggsy on Tuesday 21st April 23:15

[scotal]

haworthlloyd1 said:

it was actually the mortgage broker that said he would waive his £250 broker fee on the mortgage if she kept her legal and general protection for 48 months

hahahhahahaha..... thats to prevent him getting a clawback on the commission paid on the life case.
She should raise hell about that......

Thats the sort of thing that the FSA is meant to be stamping out.

[scotal]

haworthlloyd1 said:

scotal said:

haworthlloyd1 said:

it was actually the mortgage broker that said he would waive his £250 broker fee on the mortgage if she kept her legal and general protection for 48 months

hahahhahahaha..... thats to prevent him getting a clawback on the commission paid on the life case.
She should raise hell about that......

Thats the sort of thing that the FSA is meant to be stamping out.

i know mate, it'll never be stamped out - ridiculous. she doesn't have any dependents or husband either etc.

oh dear!

Errrrrmmmmm how has the advisor justified the sale? Is the policy in trust?

[scotal]

haworthlloyd1 said:

well im led to believe the advisor is no longer in the industry put it that way - have a guess if its in trust or not

So she simply cancels the policy now.