# Life cover - In trouble



## gotsomenow (5 Mar 2009)

Hi All,

I defaulted on payments for my mortgage life cover plan (the one that would pay out on death) for the last couple of months.  Reasons being, illness and forgetting to check that I had given them my new bank details for the direct debit.

I contacted them today thinking they would allow me pay the balance, but before I can get the policy reactivated I need to fill in a health declaration form.  Now this is where my problem really is, I have just been diagnosed with an illness which would be categorized as progressive and serious. 

Obviously they are not going to accept me back on the policy because of this, so what do I do? Am I stuffed?

Thanks

G


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## LDFerguson (5 Mar 2009)

I'm afraid you have no option but to fill in the form honestly and fully, send it back to them and see what happens.


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## gotsomenow (5 Mar 2009)

Thanks for your reply, I wasn't even thinking about being dishonest on the form.  I know I won't be accepted back though, so my question is, what do I do?  If I die, the house will be taken off my spouse I presume.


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## StevieC (5 Mar 2009)

I'm very sorry to hear about your bad news. 

If you are lucky they may accept you back with a higher premium if there is a reasonable chance that you will survive the length of the policy.

If your spouse is able to keep up the mortgage repayments through her own employment or through savings etc until she can find an income source then the house will be fine. If she is unable to keep up repayments, she should talk to the bank and see about changing the term of the mortgage to a longer period to reduce the monthly repayment and hopefully she will be able to meet this.

If you find that you are declined cover, it may be best to try to change your mortgage term as soon as possible and reduce the monthly repayment.


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## gotsomenow (5 Mar 2009)

Thank you.

The illness is listed in their serious illness cover booklet, so I imagine they will not accept me.

I am on the mortgage by myself, I'm only in my twenties and my husband is not named on the house.

I'm just so upset, I can't think straight.  I just keep imagining my other half being turfed out if something happened to me.  I wonder if they would let him continue payments if something happened to me, even if he is not on the mortgage.  

Thanks again (I am probably not making sense, but I just can't think)

G


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## Jimbobp (5 Mar 2009)

Again very sorry for your trouble. I would try & put it out of your mind regarding any worste case scenario with your husband. I have found that most banks are very accomadating if a situation like you've detailed out should happen. Interest only payments and extended terms are all options, so I wouldn't upset yourself about that. After that, I would satisfy yourself that the insurance company involved have taken all the appropriate procedures when cancelling the policy. How many reminder letters did they send you regarding the default? Did they send a registered cancellation letter telling you that the policy would be cancelled on a certain date if you didn't pay & did you sign for it? It might be a long shot but its worth checking to make sure all procedures were followed, if not you may have grounds for them to reinstate without looking for a medical declatation.


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## StevieC (5 Mar 2009)

I'm not an expert on mortgages but I would imagine it would be simple enough to change the direct debit mandate on the mortgage repayment to a joint account and in that way your husband could continue to pay the mortgage repayments.

Provided you dont plan to leave the house to anyone else then he could inherit the house tax free from you should anything happen to you and continue to make the repayments.

If anyone knows any different, feel free to correct me on this.

First port of call though is to try and get your life cover back even if it is at special terms (ie a loading on health grounds).


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## sam h (5 Mar 2009)

OP - sorry to hear your bad news, your main priority must be your health & well being. 

You said the missed payment down to illness & change of bank a/c.  Just a few things to think about & maybe follow up
 - did you instruct you bank to move all your direct debits?
 - can you prove illness at the time (hospital records etc), may help them to consider your case sympatecically ?
 - did they write to you to advise payments were missed & cover would be stopped?
 - Do the T&C's give any info in relation to such a situation?

I would imagine they have an element of responsibilty to ensure that they notify you that they are no longer recieving payments- most banks insist on mortgage cover.  Don;t know what the answer is but maybe get someone to follow up for you (you need to keep your energy up to fight your illness!!)

Good luck


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## gotsomenow (5 Mar 2009)

Thank you all so much. Your posts have given me really positive thoughts.

As far as I recall I received 2 letters (normal post), with so much going on it was only after the second letter I sent, or at least thought I sent in my new bank details.  I didn't receive any letters after this, so I didn't think anything of it, until I noticed it hadn't come out of my new bank account.   They said this morning they sent three letters, two in November and one in December.  

I will see what they will do for me, I won't give up without giving it my best anyway.

Thanks again

G


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## Bar101 (5 Mar 2009)

gotsomenow. Sorry to hear about your situation. Good luck with the fight back to good health.

A couple of things on this....
- life companies are entitled to do this as your policy effectively lapsed when you stopped paying the premiums. 
- Given your revised circumstances your priority has to be to restart your policy without filling out the health questionaire. If you can effectively "blame" the Bank (new or old) for not transferring your DD, you need to get them to contact the Insurer to fix this situation. 
- Alternatively if the Insurer did not advise you of the arrears/non payment of DD, then they may also be at fault as they are (in theory) obliged to inform your Mortgage company of the policy lapsing (assuming the interest of the Mortgage company was noted on your policy).
- Your premiums could hike up by a multiple or you could be refused life assurance if you have an "serious" illness. This would complicate the situation with your mortgage company significantly as you would have breached one of their main requirements (i.e. no life assurance)

You of course have to fill out the Health Questionaire correctly becuse you would effectively invalidate the insurance and they would not have to pay out later in event of your untimely death due to this illness.

In short get the Banks to sort this or push it back on the Life Company to sort it out. Try to avoid filling out the form. In the interim pay the arrears by cheque asap.

On your husband...if this is the family home then it would automatically transfer. If this is a 2nd home/investment property then you need to cover it in a will. However, without life cover, the loan would cease if you died (hopefully not soon) and the Mortgage company would persue your estate / secure the house. Your husband would have to apply for a new mortgage unless he is included one the current on in the inteirm.


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## Bar101 (5 Mar 2009)

A similiar(ish) case went to the Financial Ombudsman in 2006. The Life Company won.

[broken link removed]


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## Jimbobp (5 Mar 2009)

I think that case boiled down to the below, so it is imperitive that you make sure that the company gave proper notice of the cancellation. If a broker processed the policy for you, make sure they add theirs & their representative's voice to your plight.

'As the Ombudsman was satisfied that the Complainant
had adequate notice that premiums had not been received the complaint was not​upheld'.


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## LDFerguson (5 Mar 2009)

gotsomenow said:


> The illness is listed in their serious illness cover booklet, so I imagine they will not accept me.


 
It's certainly worth trying, once you've explored the options suggested above.  Just because an illness is covered by a serious illness policy, that doesn't automatically imply that a person diagnosed with it would be declined for life cover.

It is possible to obtain life cover with certain forms of cancer, for example.  (Not fishing for you to disclose your own illness, by the way, just illustrating a point.)  

Probably a shot in the dark, but if you're reading a serious illness booklet - did your policy have serious illness cover on it?


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## Bronte (6 Mar 2009)

gotsomenow said:


> . Reasons being, illness and forgetting to check that I had given them my new bank details for the direct debit.
> 
> 
> G


 Can you clarify this, when you changed banks did you get all your direct debits transferred over to the new bank?


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## Booter (6 Mar 2009)

Gotsomenow, 

You say you defaulted for a couple of months - if you mean literally two months (maybe its more?) then, that's not a huge amount. 
You could try to take a different tack. Maybe send them a pre-dated cheque covering the amount you are in arrears, and ensure that the direct debit is re-instated/operational. 
I'm not saying this would work - and some people might say its dishonest - however you might take the view that desperate times call for deperate measures.

You never know, if the cheque is cashed, and the company continue to call in the direct debit...


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## theengineer (6 Mar 2009)

dont fill anything up yet, 
run it by a solictor,


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## Sumatra (6 Mar 2009)

Direct debit missed. Normally the insurance company would reapply. If they missed a payment they would write out to you at the postal address you gave on your application form or the new address you advised. If there is still no payment they would issue a reminder then a final lapse notice.

To change a direct debit you have to give notice in writing - not verbal or e mail.

If you change address you need to inform the insurance company in writing. Would An post have returned yourundelivered post to the insurance company? Would the insurance company have a duty to try by all means to contact you - I doubt it. 

If the policy was assigned to a lender the lender would be notified by the insurance company. Should the lender try to contact you? Their terms and conditions may state it is your obligation to ensure an insurance policy is maintained.

The insurance policy itself stipulates you must pay premiums ontime. They have a 30 day period of grace but technically if a claim was to occur during the 30 days they don't have to pay.

You can revive a policy within a certain time period providing you can complete a declaration of health however this is subject to underwriting.

If you can proove the insurance company did not comply with the policy terms and conditions you might have a case. You would also have had to comply with your part of the contract. 

Feel free to e mail me and I'll try to help in any way I can but from the information you have given in this thread the odds are very very much stacked against you.


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## NorthDrum (8 Mar 2009)

Gotsomenow, Im sorry to hear about your news on your health.

There has been great advice here, so I am really just summarising whats been said -

1. Make sure that all avenues are explored in terms of how you were notified of Policy cancellation and changing banks and how this was processed (ie that it wasnt your fault).

2. Make sure whatever you do, you disclose all accurate information to the Life company as your policy is not worth anything if there is a claim and it turns out you didnt tell them everything (regarding your health).

3. Most mortgage providers try to be flexible. They dont want to reposess your house for any reason, but only do so in cases (cases that I have heard of) were houseowners ignore the problem. I have discussed this with a bank manager and his job is now debt collector. He said that he will always try to facilitate people in anyway reasonably possible. (this may not be the case for all banks, but I think most take a practical approach).

4. In terms of life cover, serious Illnesses may be considered. Differant companies will accept differant levels of risk on differant people. For example - If you put an application form into 6 differant companies it may transpire that you could be accepted by 2 of them (with significant loadings).

Lastly, try not to despair too much. The last thing you need to do with some bad news is to let something like this worry you. I know its easy for me to say, but your health is you wealth and if you let these things get to you, you can make yourself sicker. I believe the more positive you can stay, generally, the better you feel and the more you can get done. You have things to consider and options open to you, just try to get focused on what you can do.


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## Sumatra (8 Mar 2009)

To anyone thinking of submitting several applications I'd like to add:

If are finding it hard to get insurance and if you decide to apply to several companies deal with one broker who will take multiple applications and who will submit them to various companies. A good broker will know which insurers use which reinsurers. There is little point applying to companies who share the same reinsurer. 

Also don't forget to mention on each application form which companies you have applied to, the date you applied, they type of cover you applied for and the amount otherwise its non disclosure of a material fact.


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## gotsomenow (9 Mar 2009)

Hi all, thanks again for your replies.

To the poster regarding DD: Not I didn't have the banks acting on my behalf, I did the bank account change myself. 

I got this reply from them regarding letters:

''In relation to your query I can confirm that letters were sent to your correct address & to your broker XXXXX on the dates advised by my colleague and I have attached these for you to view.

There would be no requirement to have these reminder letters sent by registered post as we do give sufficient time for the payment to be made before a plan goes out of force and we do send more than one reminder letter.

 I do agree that having Life Cover in place is a serious issue and therefore I would stress the importance of you completing & returning the forms sent to you by my colleague so that we can out your plan back into force as soon as possible.''

I didn't get anything from my broker, but maybe that wouldn't be standard.

I've decided to just fill in the form and see what happens.  I am a lot calmer now and I was thinking that maybe somewhere down the line after paying for years the policy could be void as I am hoping to get on to a new drug trial and that would probably be classed as something against the t&c's.. 

With every cloud...  I got some great news today about my mortgage which was also behind


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