I recently got a residential mortgage with the help of a mortgage broker and one of the contracts I signed was a fee waiver form. This form specifies that if I take out some kind of protection with the broker then a fee that would normally be charged would be waivered.
One of the terms in the contractual agreement was the following:
- The Client engages the Arranger to act on his behalf in order to arrange a term assurance, critical illness, income protection or private medical insurance policy (“the Policy”)
After taking out the mortgage, the broker has rightly contacted me to arrange some kind of protection. I specified that I wanted to keep costs down and would like to just take out a life insurance policy, which is around £5 per month. However, the broker says that he could not recommend that and says that as a minimum I would need to take out both life insurance and critical illness insurance, which is an extra £20 per month.
From my understanding of the above term, the 'or' implies that I can choose which kind of protection I would like to take out with the broker and I am not contractually obliged to take out both life insurance and critical illness insurance with him. Both of which have been quoted as not the cheapest on the market as the broker only has a range of providers that he can choose from. These providers obviously pay him a commission for taking out the protection.
I've attached the full fee waiver contract so you can check not just this term but the whole of the contract.