Unit Linked Whole-of-Life Decision Reference 2025-0078

• Case Outcome: Partially upheld
• Year: 2025
• Reference: 2025-0078
• Date: 30 June 2025
• Subject Matter: Unit Linked Whole-of-Life
• Finantial Sector: Insurance
• Conducts Complained Of: Fees & charges applied (life),Failure to process instructions, Lapse/cancellation of policy (life)

Decision Ref:

2025-0078

Sector:

Insurance

Product / Service:

Unit Linked Whole-of-Life

Conduct(s) complained of:

Fees & charges applied (life)

Failure to process instructions

Lapse/cancellation of policy (life)

Outcome:

Partially Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

This complaint concerns a whole of life assurance policy.

The Complainants’ Case

The Complainants submit that they held a life insurance policy with the Provider which

commenced in 1998. They state that they initially decided to stop paying the premiums in

March 2018 as they “found it expensive” and though they then repaid the two missed

premiums, they ultimately decided to not recommence the direct debit. They state that

the reason for this was a phone call they had with the Provider on 17 May 2018 where

they understood from that call that the accumulated value of approximately €11,000

(eleven thousand Euro) would be preserved if they stopped paying for it. The

Complainants are dissatisfied that, in spite of their understanding from this phone call, the

accumulated value was exhausted by the Provider to maintain cover until 1 November

2018.

- 2 -

/Cont’d…

The Complainants complain that they were led to believe that this accumulated value

would be preserved for their use at some future date and state that they received a “lapse

letter” which was issued to them on 11 July 2018 and that their understanding of the word

“lapse” is that the policy had stopped. They point to the fact that they would need to

“undergo medical underwriting to reinstate the policy” as further evidence that the policy

had ceased in July 2018. The Complainants wrote to the Provider on 21 April 2020. The

correspondence included the following:

“-When did you receive the last Direct Debit for this policy and what was the fund

value at that date?

-From 22nd February 2019 to 24th February 2020 there is a protection charge of

€4,901, what was this for as there were no premiums received during this period

and the policy had lapsed?”

The Complainants state that they wrote to the Provider instructing it to cease deductions

on 19 May 2020 but that this instruction was not carried out and the fund was exhausted

in November 2020. The Complainants want the accumulated value to be paid to them in

recompense.

The Provider’s Case

The Provider submits that it was obliged from March 2018 to notify the ISI (Insolvency

Service of Ireland) “of any request made by the Complainants to make changes to the

policy or requests to make a withdrawal from the policy, be it a claim payment or

encashment”.

The Provider submits that it was “advised electronically by the Complainants’ Bank that the

direct debit payment for April 2018 had been returned unpaid as the mandate had been

cancelled”. The Provider states that it wrote to the Complainants, advising them of this

and providing options to them to make a payment, including a direct debit mandate.

In response to the Complainants’ letter of 21 April 2020, the Provider stated:

“The last direct debit received on this policy was on 1st March 2018. The direct debit

mandate was cancelled when we applied for April 2018 payment by direct debit.

Please note a payment for €1,142.82 was made by credit card on 11th May 2018.

The value on the policy on 14th May 2018 (next working day) was €11,359.49.