I applied for life assurance last year to cover my mortgage. After I had applied and been accepted for the Policy the company increased the premiums by 25% because I had suffered from 'Stress' in the past. (This was supposed to be a fixed monthly payment policy).
I immediately cancelled the Policy. Does anyone know any good companies that do not apply a loading or only a small one for such a minor health issue?
I have worked full time for many years and have not taken any sick time due to this 'problem'.
I didn't "let" them. They just did it! They just wrote to me stating that because of my stress the Premiums would be more. They took the higher amount from my Bank account via the Direct Debit mandate that had been set up.
Had you actually put the policy on risk before they changed the terms? If you didn't and there was any change to your health between application and going on risk then they are entitled to. But not if it was already on risk. What company was it?
Sorry. I don't know what "on risk" means. It's a term I have never heard of.
What happened was: I applied for life assurance via a broker to cover my new Mortgage. He quoted a certain figure per month. I filled in the application form. I think it was sometime later the company sent me a Health questionair with lots of questions. One of the questions asked if I had ever suffered from stress.
I can't exactly remember when I found out about the premium increase. I think I just noticed the higher amount on my Bank statement when it arrived. I phoned the broker and he told me to contact the Insurance company direct so I wrote them a letter as I assumed it was a mistake. They didn't reply after several weeks so I wrote again. This time I asked them not to debit my bank account until the matter was sorted out.
Later on I received two very short letters from the Insurance company, one saying that the premiums were higher due to what I wrote on my health form. They gave no more detail than that. The second letter just said that they had refunded the premium.
My broker phone me up a week or so later and asked me if I had cancelled my policy. I told him no. After a few more phonecalls it transpired that the Insurance company had interpreted my letter as a cancellation request.
This was a few months ago. I haven't followed it up because I'm not sure how.
It's the same as putting the policy in force or starting it up. After you've sent the application in the company will decide whether to accept you on normal terms as per the quote or whether they want to offer you terms with an increased premium. At this stage they haven't accepted the risk, or to put it another way, the policy is not in force. If you accept the terms then you or the broker tells them and they then put the policy in force. They can't change the terms thereafter. But if the policy wasn't in force then they have the right to change the terms of it - which you accept or not as the case may be.
So my question was, was the policy in force when they changed the terms? In theory it wasn't, but then again, I wonder why they took premiums if it wasn't.
I wonder whether you sent the cancellation notice back having signed it thinking it was agreement to go ahead. People do this sometimes and the insurance company then has to cancel the policy and refund the premiums if it was done within 2 weeks of the receipt of the policy document by the client. If after that time the policy can be cancelled but the premiums paid won't be refunded.
You'd be better phoning them rather than writing, or getting the broker to.
I guess it wasn't in force then. I was under the impression the premium that was given me by the broker was a firm "quote". However I would have thought that someone should have told me about the higher premiums before just debiting from my Bank account.
I've still got the cancellation notice.
I did try once or twice, but got the usual switchboard runaround.
Some companies, these days, will accept a policy in principle based on the paper proposal and allow the policy to go 'on risk' and say that normal terms will apply until they follow up the underwriting and then they reserve the right to alter the premiums or even decline. Its a sneaky way of getting business on the books.
IF the broker saw the original proposal then he should have suspected there would be a problem, I suspect him, not the LIfeco.
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