# Loan insurance repayment issue



## Dodger (27 Feb 2015)

Can anyone advise I owe credit union a some of money and have used half the value of the debt as security on the loan. Due to circumstances I have been retired due to physical disability does this entitle me to claim insurance to clear the debt as I can no longer persue an occupation .The credit union website displayed information to this effect when I took out the loan and did not indicate to me any reason to take out Loan Protection Insurance.Now that I have queried and asked for assistance their website page has been amended in the last week with this element of cover no longer showing on the website. I took a screen shot of the orriginal loan insurance screen just to have a record of it prior to my query and all this sort of cover information  is now removed, it stated in in these  circumstances disability was covered up to 60 years. I am now told by credit union on their query to their insurance company that their insurance does not cover this eventuality.Is this a case of false advertising as I believed my loan was insured and was built into repayments without having to take out an extra policy. My understanding is that perhaps the money used my myself as security was my commitment to the loan and whatever is outstanding less this security is the insured sum in dispute. any advice would be appreciated.


----------



## trasneoir (27 Feb 2015)

What was the original value of the loan?
How much remains to be paid on the loan?
Do you have your copy of the loan agreement/Ts&Cs?
Does the loan agreement (or any attached documents) make any mention of insurance?


----------



## Dodger (28 Feb 2015)

Thank you for your query and advice trasneoir, terms and conditions "where members elected to avail of rpi the amount is included in the amount of loan advanced The member authorises the credit union to to pay Rpi directly to insurance company" My point is to the credit union really in that I was not offered rpi on any quote and when querying their repayments via their repayment calculator I borrowed on that  repayment quote and because of ad on loan insurance assumed it was included in the repayment  Since my query to  the credit union last week they have now changed the details of loan insurance on their website to exclude my query on disability cover and have now mailed saying they contacted their insurance and this cover is not provided. 
On credit agreement in (important info for internal use ) it says no rpi. I am not aware that one could take out rpi as I understood loans were insured to protect in case of death and in case of sudden loss due to disability leaving the borrower unable to peruse an occupation in order to pay back the loan Their site does not show what it would cost to insure a loan or the cost of RPI. I assume that they are saying not insured because they see my savings and this will off set lone. I wonder what your opinion on this would be or if anyone has an opinion.


----------



## trasneoir (1 Mar 2015)

Dodger said:


> On credit agreement in (important info for internal use ) it says no rpi.


Sounds like your agreement doesn't include insurance.



Dodger said:


> I understood loans were insured to protect in case of death and in case of sudden loss due to disability leaving the borrower unable to peruse an occupation in order to pay back the loan


You are describing RPI/PPI. It's an optional extra which is sometimes sold to _borrowers _as an "add on" to a loan (like the extended warranty on your microwave). Much like the extended warranty, it's got a high profit margin, so lots of lenders pushed them pretty hard.

AFAIK lenders would never take it upon themselves to buy this insurance for a borrower. Even if it was legal for them to do so (I'm not sure) it is expensive, inefficient, and would require a bunch of your medical details.



Dodger said:


> Is this a case of false advertising as I believed my loan was insured and was built into repayments without having to take out an extra policy.


Doubt we can answer this without seeing the exact text of an ad. If an ad was worded badly you might get Comreg (edit: ASAI) to give them a slap on the wrist, but that's no help to you.
My amateur opinion is that unless you have some kind of written evidence that this insurance was in place _for your loan_, this will probably be a case of "buyer beware".


----------



## Dodger (1 Mar 2015)

trasneoir said:


> Sounds like your agreement doesn't include insurance.
> 
> 
> You are describing RPI/PPI. It's an optional extra which is sometimes sold to _borrowers _as an "add on" to a loan (like the extended warranty on your microwave). Much like the extended warranty, it's got a high profit margin, so lots of lenders pushed them pretty hard.
> ...


----------



## Dodger (1 Mar 2015)

Thank you trasneoir I reluctantly agree with you on the RPI for the policy, but cu policy is that when a member dies with an outstanding loan  the loan is written off this is the case in my credit union, and is covered without any special RPI being taken out.This policy I believe should also apply if a person is unable to pay back a loan due to not being capable off, or allowed to persue employment in order to pay back the loan,this I believe may be the policy and perhaps no insurance is required in these circumstances just admittance to CU policy since it was on their website up to last week. 
I wonder are there any rules governing this situation by credit unions ie with respect to their members. Below is copy of  what CU website stated before I queried my position  and did not get  reply for 10 days after mailing and conversing with office, with info to effect manager looking into it and will be in touch. Now they have removed all referance's to disabilities from there loan insurance statement on their website I believe after speaking to their insurance company.  
Below is what site did say.

"Loan Protection insurance is the insurance  the credit union provided on the lives of it borrowing members.
Should an insured borrower die or (under most contracts) become totally and permanently disabled for any occupation, the insurance cover provides that the loan is paid in full. If a member who is eligible for insurance cover dies with a loan outstanding the loan balance is paid in full by the insurer. 
You will be informed at the time of the loan application if your loan exceeds  the amount covered by the credit union policy
Under the basic policy death cover cease on members 70 birthday.The credit union has the option of extending this age limit to members 80th birthday by affecting cover under the 70 rider.Disability cover however however ceases on the eligibility members 60th birthday"

I have  signed a promissory, but was not given any indication to requiring RPI so assumed it was covered for this see above and there was no reason to take out a seperate policy.I think I may have to speak to credit union manager to try and sort out some sort of repayment agreement
Thanks for your input if anyone else as advice it would be appreciated. on how to deal with situation.


----------



## trasneoir (1 Mar 2015)

Dodger said:


> "Loan Protection insurance is the insurance  the credit union provided on the lives of it borrowing members.
> Should an insured borrower die or (under most contracts) become totally and permanently disabled for any occupation, the insurance cover provides that the loan is paid in full.


I stand corrected, that's pretty clear that some protection is provided from their "end". If "most" of the union's loans carried this protection as a matter of course, then the minority who don't enjoy this protection should be notified explicitly. 

If it were me, I'd escalate to the manager and plan to seek legal advice if her answers aren't satisfactory and prompt.

I'd also be looking at facilities like Wayback Machine and Google Cache : independent records of websites' historical content.


----------



## Gerry Canning (2 Mar 2015)

trasneoir said:


> I stand corrected, that's pretty clear that some protection is provided from their "end". If "most" of the union's loans carried this protection as a matter of course, then the minority who don't enjoy this protection should be notified explicitly.
> 
> If it were me, I'd escalate to the manager and plan to seek legal advice if her answers aren't satisfactory and prompt.
> 
> I'd also be looking at facilities like Wayback Machine and Google Cache : independent records of websites' historical content.



Disagree.
1. Any organisation does not have to{ explicitly } advise the minority of this PPI protection.
Remember ,It was an optional add on.
2. I see poster was retired due to {physical disability}. From knowing PPI
I would be very surprised if PPI would pay out in his case. Even at best most PPI paid max of 6 months repayments.
3. BY all means query with manager , but going legal is in my opinion not sensible. 

Not all Unions offered PPI and I think most Unions quickly concluded PPI was not a great product for their members.


----------



## trasneoir (2 Mar 2015)

Gerry Canning said:


> 1. Any organisation does not have to{ explicitly } advise the minority of this PPI protection.
> Remember ,It was an optional add on.


Customer-bought PPI was an optional add-on, granted. The OP wasn't explicitly offered it, and didn't avail of it. No problem there.

From the text OP quoted, the CU suggest that "most" of the CU's loans have got PPI "built in" from the CU's end. The OP was not made aware that this loan was an exception.


----------



## Gerry Canning (2 Mar 2015)

trasneoir said:


> Customer-bought PPI was an optional add-on, granted. The OP wasn't explicitly offered it, and didn't avail of it. No problem there.
> 
> From the text OP quoted, the CU suggest that "most" of the CU's loans have got PPI "built in" from the CU's end. The OP was not made aware that this loan was an exception.


Transneoir.

He isn,t correct .
I think all Unions have protection added in on loans should customer die.

The PPI was an extra over and above death benefit, that customer could have had the option of  availing of
 ,to my sure knowledge PPI was never nor could be {built into } any loan.
It would have been unfair to insist on extra insurance eg.PPI on any Union Loan.

I cannot see the Poster having a case here ?


----------



## Dodger (2 Mar 2015)

Gerry Canning said:


> Transneoir.
> 
> He isn,t correct .
> I think all Unions have protection added in on loans should customer die.
> ...


----------



## Dodger (2 Mar 2015)

Thank you Ger  and transneoir for your contribution  It is my belief CU does not sell or advertise PPI as a result they should have insurance to cover an event such as mine.Just my uneducated opinion. 
Cu have now admitted via letter  "The website does state  under most contracts that disability cover is provided" however our contract does not cover this eventuality, nice and convenient for insurance company ( and now removed from website after consultation with CU insurer ).Do you think my credit union is the only cu that does not provide this cover. There must be some legality to make sure members are covered in situations like mine due to being unable to percue an occupation ever in order to pay back loan. This situation can only create hardship and there should be legality in areas of this circumstance or some flexibility from CU made  compulsory.Could any  advice be offered as to the best way to pay back this sum. ie using sum that has been set aside as security a quite substantial sum  and request for repayments to be reduced, or perhaps write off amount then owed..The sum owed would  be less then the monies used as security maybe this is an option what do you think.Getting a bit desperate now i think. I will leave things at that and try and sort something out with CU feel they have not looked after a members best interests here.


----------



## Gerry Canning (2 Mar 2015)

Dodger.

Insurance is as you know a minefield!.
Lenders eg Unions should just lend and leave it at that.

In fairness they have a blanket Life cover into their loans.
The problem with sickness/disability/redundancy is that these are much too broad to be able to adequately automatically add them in on all loans.

The Loan rests as your responsibility .
Insurance for unforeseen risks is also in your lap !.

From knowing Unions , I would think they will give you a fair hearing and come to a fair arrangement on what you owe.

And sorry if I have dashed your hopes! with my input.


----------



## Wallpaper (3 Mar 2015)

It sounds like your original loan was covered by LP/LS insurance.  This is provided by the Irish league of Credit Unions to their members and is run by ECCU.  They have two types of policy, one which covers death only and one which covers death and disability.  Each credit union decides itself which option it will go for.  The credit union pays the insurance, it doesn't charge the member individually for this policy.  I would say what happened is your credit union originally had the disability cover (even with this cover it is hard to get a pay out, you need to be certified with a condition of health which renders you totally and permanently disabled to carry out any occupation).  In 2014 ECCU changed the loan protection policy and increased the costs.  Your credit union may then have decided not to take out the disability clause due to the increase in cost.


----------



## Slim (4 Mar 2015)

From my CU site:
"Should an insured borrower die, or (under most contracts) become totally and permanently disabled for any occupation, the insurance cover provides that the loan is repaid in full."

As stated above, 'totally and permanently disabled' would imply catastrophic illness/disability. If disability from your job was covered, no PPI or RPI would be necessary.

In your circumstances, you could ask the board to consider a partial write down on the basis that you were mislead by the website and use your shares to pay down the balance.


----------



## Dodger (4 Mar 2015)

Thank you for your advice Slim I think that would be the best course of action. Perhaps writing to CU manager would be the best way to highlight this.


----------

