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A guide to mis-sold life insurance

There are few worse feelings than realising that you have been mis-sold something and unfortunately many people will experience this at some point in their life. What can add insult to injury is if you have been mis-sold on something as important as life insurance. They generally don’t come cheap so a policy that doesn’t work for you can be a major setback. If you have found yourself in this situation then it can seem difficult to work out how to approach it, we have put together this guide to take you through the process.

In This Guide:

What does it mean to be mis-sold insurance?

There are different ways in which someone could be mis-sold life insurance, we have highlighted two key ways in which this can happen to someone.

Pressure

Sometimes a policy simply isn’t what you're looking for and although having doubts is fairly natural if you hold serious reservations you know it probably isn’t right. If you take out a policy through pressure from an organisation, then this constitutes as having been mis-sold. It will generally be through aggressive sales tactics such as exaggerating the dangers of not having one or being offered a price for a very short time in order to not give you time to think about it.

Unsuitable Policy

When applying for life insurance, one of the main factors will be to offer peace of mind to the buyer that they are covered in all instances. This will generally take one of two forms, either you will be sold a policy which does not provide you appropriate levels of cover for example if you have a medical condition that does not allow you to claim on a certain policy but you are sold it anyway, then you have been mis-sold. Conversely, if you are wrongly informed that you need a higher level of coverage than you actually do, meaning that you are paying for something you do not need, then this also can be classified as being mis-sold.

What to do if I have been mis-sold life insurance?

Here is what you need to do if you believe you have been mis-sold life insurance:

  1. The first thing to do is to gather all the documentation that indicates that you were sold something under false pretences. This will include a copy of your actual policy as well as any correspondence with the company (email or letters).
  2. Once you have done this, you will want to get in touch with the company that you took out the policy from. Generally, it’s best to send an email first highlighting all the reasons that you think you have been mis-sold along with any supporting documentation. It’s important to clearly state your point while remaining polite as this could be an accident and it’s important to keep the conversation civil to get the best outcome
  3. If an email is not getting you anywhere, then it’s always worth following up with a phone call. The value of this is that speaking to someone on the phone allows you to escalate the issue far more quickly and makes you much harder to ignore. Remember to get email confirmation of any promises or assurances, however.
  4. If the issue is still not resolved 8 weeks after the initial complaint has been launched, then you are entitled to go to the ombudsman who acts as a consumer champion and will take the fight to the insurer on behalf of you. Make sure you provide them with all the information and correspondence with your insurer.

How to prevent being mis-sold insurance

The best way to deal with being mis-sold life insurance is to never have to go through it in the first place. Here are some tips to ensure you don’t go through this ordeal:

  • Always make sure that you have enough time to think about it and if you feel that a certain policy is not going to be right for you make sure everything is amended before you take it out.
  • Secondly, it’s important to make sure you read over the terms and conditions before agreeing as once you’ve signed, it can make going back on it very difficult.
  • In some instances, it may ever be worth getting a lawyer to look over it just to make sure it’s watertight. It may seem an unnecessary expense but terms and conditions in insurance policies can be complex and the real cost will arise from purchasing something that does not suit you.
  • Finally, the best way to make sure that you get the best deal with any life insurance is to shop around, certain insurers will offer better deals than others so you're unlikely to get the best offer without doing the rounds. Money Expert can compare life insurance deals for you, to help you find a deal that suits your needs and budget, so start comparing today.