Unit Linked Whole-of-Life Decision Reference 2025-0182

• Case Outcome: Substantially upheld
• Year: 2025
• Reference: 2025-0182
• Date: 15 December 2025
• Subject Matter: Unit Linked Whole-of-Life
• Finantial Sector: Insurance
• Conducts Complained Of: Failure to explain/understand index linking,Failure to process instructions, Maladministration (life), Results of policy review/failure to notify of policy reviews

Decision Ref:

2025-0182

Sector:

Insurance

Product / Service:

Unit Linked Whole-of-Life

Conduct(s) complained of:

Failure to explain/understand index linking

Failure to process instructions

Results of policy review/failure to notify of policy

reviews

Maladministration (life)

Outcome:

Substantially Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Since 22 September 2005 the Complainants have held a dual-life assurance policy (the

"Policy") which is underwritten by the Provider; an insurance company. The Policy includes

a unit-linked fund and a portion of the Complainants' monthly payments are invested in

assets which may increase or decrease in value.

A feature of the Policy agreed between the Parties is that both the monthly payments

made by the Complainants and the monetary value of the benefits under the Policy would,

subject to the Complainants' instruction, rise year-on-year in order to protect the value of

the Policy from being diminished by inflation. This annual increase is known as indexation.

The Provider accepts that on multiple occasions between 2005 and 2020 indexation was

either not applied or not correctly applied to the Policy.

- 2 -

/Cont’d…

The Policy is also subject to periodic review by the Provider so that it can assess whether

the monthly payments being made by the Complainants and the value of fund are

adequate to support the level of cover under the Policy and the associated costs.

On 3 July 2020 the Provider wrote a letter to the Complainants to inform them that their

monthly payments and fund value were no longer adequate to sustain the level of cover

under the Policy (the "Policy Review Letter"). The Provider proposed three options for the

Complainants, one of which was Option C. Option C was a proposal to increase the

Complainants' monthly payments to €333.92 (three hundred and thirty-three Euros and

ninety-two Cents) in order to maintain their benefit of €238,587 (two hundred and thirty-

eight thousand five hundred and eighty-seven Euro) for the rest of their lives or until the

benefit ended. These sums were not guaranteed and could be subject to further review by

the Provider.

On receipt of this letter, the second Complainant queried with the Provider whether

indexation had been applied correctly to the options proposed. In response, the Provider

sent the Complainants a further letter on 22 October 2020 setting out revised terms for

each of the three options (the "Revised Policy Review Letter"). For Option C the Provider

now proposed that the Complainants' monthly payments increase to €1,324.52 (one

thousand three hundred and twenty-four Euros and fifty-two Cents) with indexation in

order to maintain a benefit amount of €263,042 (two hundred and sixty-three thousand

and forty-two Euros) with indexation for the rest of their lives or until the date the benefit

ended. Again, this was not a guaranteed sum and could be reviewed at a further stage.

The Complainants’ Case

The Complainants state that indexation was not correctly applied to the Policy from its

inception in 2005. They state that they queried this with the Provider and there was a

mutual agreement between the Parties to annually apply indexation from 2015 onwards.

However, the Complainants state that indexation was not applied to the Policy again in

2016 or 2017.

The Complainants state that they contacted the Provider again on 25 July 2018 about their

plan being administered incorrectly and raised a complaint. They state the Provider

corrected the errors and paid them compensation in the amount of €300 (three hundred

Euros). At this point the Complainants say they considered the matter to be fully resolved.

The Complainants submit that further issues materialised in July 2020. They state that they

received three Policy review options on 3 July 2020 from the Provider with two of those

options "clearly stating indexed cover." They describe the options presented as: