“When CI comes as part of a mortgage, they don’t mind another small amount being added to the payment as they recognise its role in protecting their most important financial asset against unforeseen illness.”Other significant companies on the market include Legal & General, Swiss Life, Scottish Provident, and Norwich Union. All provide policies which give average cover of pounds 50,000-pounds 60,000 on diagnoses of such conditions as multiple sclerosis, kidney failure, heart disease and even CJD.Current Legal & General premiums are among the best in the market. A 30-year-old man wanting pounds 50,000 comprehensive C1 cover for 25 years will pay a guaranteed premium of pounds 14.05 per month. Scottish Provident’s rate is slightly higher at pounds 19.09.While most critical illness policies cover more than 30 conditions, the vast majority of claims are usually for heart attacks, cancer or strokes.
As a result, policies exist which provide CI protection for just these three major illnesses, such as Abbey Life’s Living Assurance Select.Bryan Fisher of IFA firm Berkeley Financial Planning says: “It’s very much a case of choosing whether you want to have third party cover or pay that bit extra to be fully insured against most range of illnesses. Having a policy which only covers the main three illnesses is fine until another one strikes, which is something you can never predict.”While the sale of CI cover with mortgage continues to thrive, as a stand alone product it still has some way to go before becoming as popular a part of our financial planning as pensions and PEPs. The name “critical illness” does provoke negative connotations in many consumers who take health for granted and cannot contemplate the thought that a horrible illness could strike at some stage in their life. But just as you assess the risks of an equity investment going wrong, take time to look at the risk of a sudden serious medical condition playing havoc with your quality of lifenScottish Provident 0131 558 2740, Legal & General 0345 125626, Berkeley Financial Planning 01203 555240, Swiss Life 0345 228866.. Two weeks ago, one of the big four High Street banks sent me a cheque for pounds 7,343.75 instead of the pounds 352.50 which they actually owed me. My first urge, naturally, was to cash the cheque immediately and head for Bermuda.
Instead, I thought I’d better call the bank in question and ask if they had decided on a particularly generous bonus for the work involved – a freelance article for the bank’s internal use
Sadly, this was not the case. It turns out that the cheque had been intended not for my own Informed Sources Ltd, but for another company with a similar name. Someone in the bank’s accounts department had keyed in the wrong company code. A few days after my initial call, they requested that I tear up the cheque, which I duly did.
But what if I had simply banked it? Here we have a substantial overpayment at the bank’s error, with no encouragement from me. Clearly, it was obvious the cheque was far too large, making any attempt to keep the money out and out theft.
We all know, however, that it can take large organisations weeks to catch up with something like this. Could I have at least gathered a few quid in interest on the pounds 7,000 overpayment while waiting for them to chase up their error?Deputy banking ombudsman Chris Eadie says there is no single principle which can be brought to bear here. “I wouldn’t like to say there was necessarily anything wrong with somebody putting the money into an interest bearing account until it got sorted out and then claiming the interest,” he says.”I would have thought that if somebody, realising there was some mistake, put the money into their building society account to earn a bit of interest, that would be a matter between them and the bank. The bank might claim interest but, it being their mistake, I think it very unlikely that they would.”Eadie also confirms that the fondly held idea that banks’ customers can simply hang on to any payments made in error to their account – still heard in saloon bars up and down the land – is really just an urban myth. “Some people argue that, because the bank has made the mistake they shouldn’t have to pay it back,” he said. “That is, in our view, usually an unreasonable approach.”Jackie Hewitt, a Consumers’ Association lawyer, says the question here is one of what the law calls “unjust enrichment” and that this idea applies just as much to any interest earned as to the overpayment itself.”Essentially, the principle is that you’re not to benefit from somebody else’s mistake,” she says. “They may well be within their legal rights to say ‘give us that interest back, it’s ours’.” Hewitt adds that the company which should have received the cheque may well then act to recover their lost interest, on the grounds that the bank’s payment to them was late.Both Eadie and Hewitt say what occurred in my own case was unusual.
