The company cancelled the policy after two successive payments had not been made because of insufficient funds being the couple’s account.
Ms Sweeney insisted she was unaware there was a problem and had never received any letters warning that the policy was due to lapse.
The insurance company claimed it had sent three letters to the couple and further letters to their building society informing them the policy was due to lapse.
Like Ms Sweeney, the building society said it had received no such correspondence. Registered post was not used so there was no proof the letters had been sent
The fact that the mortgage company also has no record of getting notifications of missed payments is significant.How would you rule in the case WizardDr?
That life policies should remain in place whether the premium is paid or not?
Two payments had bounced, so they already had at least one month's free cover? It may have been longer as we have not seen the Ombudsman's full decision.
They say that they sent three letters notifying the policyholder that payments had been missed. We know that life companies send such letters. Why would you believe that they departed from their normal practice in this case?
This is obviously a very sad case, and it's natural to feel that the big profitable insurance company should pay out the widow even though the policy had lapsed. But you have to put the sadness aside and look at the facts of the case. They had missed two premiums. They had free insurance for a period of time. Then it lapsed.
Tough on her, but fair.
The fact that the mortgage company also has no record of getting notifications of missed payments is significant.
Ms Sweeney said last night. “I thought the Ombudsman was supposed to help the likes of me."
I switched home insurer last year, and I had a letter from Danske some time later asking me about insurance, as the previous insurer had notified them that I hadn't renewed. I can't recall the exact timing or how long it took, but the letter had definitely gone to Danske, and they actioned it.I am not sure that it is.
I have discussed this issue with people recently and mortgage lenders don't seem to take any action when they get notified that a mortgage protection policy has lapsed.
So what happens in practice? Was the lender so well organised that they keep copies of all paper correspondence which they get? Are they kept on the borrower's file? Are they thrown in a corner to be followed up?
We know that when payments are missed, life companies write to the insured and tell them that the payment is missed. We know that they write to the mortgage lending company named on the policy. This presumably is automatic and it is unlikely not to be done due to human error.
The Bank should then be permitted to take premiums or again a REGISTERED LETTER to the mortgage holders in plain english.
Brendan - I think the lapsing of a policy like this is hugely significant. I am long enough in the game to know that the procedures of insurance companies on letting people know about cancellations are off the wall in relation to the potential consequences.
With all the modern communications and all the nonsense about protection and consumers that Insurance company should have been forced to send at least TWO REGISTERED LETTERS - one to the Bank who had the policy interest noted and two to the holder (and spouse) of the Policy. I think there could be a Family Home Protection Issue here.
The Bank should then be permitted to take premiums or again a REGISTERED LETTER to the mortgage holders in plain english.
I would trawl through the processes of this Insurance Company and if they are unsatisfactory I would flog the directors in public and name them.
From the Irish times report I get the impression that the procedures are fairly poor - but I might be wrong.
I think your reply simply is moving into the realm of not appreciating how consumers may not fully understand consequences particularly a man who later took his life.
would anybody agree that the cancellation process should be as simplistic as it appeared in this case?
As a step in the Process - apart from what the Insurance Company should do - the Bank should take the premiums (if it can) before a FINAL Registered Letter written in plain English warning of the consequences is sent by the Bank. How could it possibly be in its interest to have the policy lapse?
Also given that insurance is a legal requirement in most cases for a residential mortgage, would anybody agree that the cancellation process should be as simplistic as it appeared in this case?
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