Mis-sold Income Protection Insurance – MoneySavingExpert.com Forums


Hello All,

I hope that I am posting in the correct forum as I need some advice/opinions on my current situation.

I took out an Income Protection Insurance policy through an FCA regulated broker (leaving the name of the broker out at this stage) with whom I went through a lengthy interview with to find the protection that best suited my needs.

To summarise, I am a self-employed contract worker and hold several contracts. I was looking for a policy that would cover me in the event that I lost one of my contracts as each one is worth roughy £1,500 – £1,600 per month. On the advice of the broker, I took out a policy with a well-known and reputable company as I was told that it fitted my requirements exactly. It is important to note that I wanted to be covered in the event of losing one of my contracts, as it would be unlikely and most unfortunate if I were to lose all of them at the same time. All of this was noted by the broker on their system and also in writing to me on the Demands and Needs letter that I was sent both via post and email. The broker even checked (purportedly) with someone to ensure that this would be the case.

Unfortunately, this week I was informed that due to financial constraints, one of my contracts would be terminated at the end of next week. When I called the insurance company to make a claim, I was told that I would be unable to proceed as they only cover for complete unemployment, rather than the loss of/reduction of income. in order for them to pay out, I would have to cease trading entirely, which is obviously not an option. This is in complete contradiction to how the policy was sold to me and leaves me in a position where I am losing around £1,500 per month when I was under the impression that the policy I had taken out and have been paying for would cover me for this amount for up to 12 months.

The broker has accepted liability and to their credit, have been extremely apologetic and at this stage are not trying to wriggle out of the fact that the information I was given was completely incorrect. Thankfully, all of the conversations I had with their representative have been well documented in addition to the calls having been recorded.

This however still leaves me in a position where I am unable to claim on the policy. I would expect the broker to be compensating me for the amount that I was expecting to receive, owing to their bad/incorrect advice and mis-selling of the policy, in addition to a refund of all premiums paid up until this point. How realistic is this? I am panicking slightly as it is a big chunk of my income that is disappearing. After all, the reason for taking out this type of insurance is to allow for bills and other financial commitments to be unaffected; it seems unfair and wrong that I should be in a position where I am unable to do this owing to someone else’s incompetence.

Any experience of this would be greatly appreciated.


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