Unit Linked Whole-of-Life Decision Reference 2022-0139

Case OutcomeRejected
Subject MatterUnit Linked Whole-of-Life
Date22 April 2022
Finantial SectorInsurance
Conducts Complained OfMis-selling (insurance),Failure to explain/understand index linking
Decision Ref:
Product / Service:
Unit Linked Whole-of-Life
Conduct(s) complained of:
Mis-selling (insurance)
Failure to explain/understand index linking
The Complainants incepted a dual life whole of life insurance policy with the Provider on 1
January 1984. The First Complainant is now age 83 and the Second Complainant, his wife, is
now age 81.
The Complainants were advised on 28 May 2020 and again on 10 August 2020 that this
Office could not examine any complaints they had in relation to the sale of the policy in
1983, as the conduct giving rise to those complaints, falls outside the time limits set out in
Section 51 of the Financial Services and Pensions Ombudsman Act 2017. The Complainants
were also advised that this Office could not examine any complaints they had in relation to
the premium rates that were applied to the policy, as this is at the commercial discretion of
the Provider.
This complaint concerns the Provider’s administration of the Complainants’ whole of life
insurance policy from 2002 through to December 2019, when the Complainants cancelled
their policy.
The Complainants’ Case
In November 2019, the Complainants’ policy was providing life cover in the amount of
€44,403.00 for the First Complainant and €36,140.00 for the Second Complainant, for a
quarterly payment of €693.32.
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Following a policy review, the Provider wrote to the Complainants on 4 November 2019 to
advise that in order to maintain indexation, life cover in the amount of €46,623.00 (forty-
six thousand six hundred and twenty-three Euro) for the First Complainant and €37,947.00
(thirty-seven thousand nine hundred and forty-seven Euro) for the Second Complainant
until 1 January 2021, the quarterly payment would need to increase to €2,041.42 (two
thousand and forty-one Euro and forty-two Cent).
The Complainants emailed the Provider on 26 November 2019, as follows:
“… Under what circumstances would this €46,623 and €37,947 be paid out?
In other words what is this cover for?
Why is the cover amount different and equal for each of us?
Why are the payments for this cover going up by 380% from €2.7k p/a to €10.5k
In that regard, the Complainants’ Representative says that the Provider should have better
informed the Complainants over the years, of the suitability of maintaining their whole of
life insurance policy, having regard to the Complainants’ specific needs and circumstances.
In particular, the Representative says that once the First Complainant retired in 2000, the
policy was no longer appropriate for the Complainants and the Provider ought to have
advised them of this.
The Complainants’ Representative also questions the adequacy of the information that the
Provider supplied to the Complainants on an annual basis, in that she says the annual
statements merely stated the amount paid and the premium charged and failed to clearly
state the purpose of the policy, the type of cover the policy provided or under what
circumstances the policy benefit would be paid out.
In addition, the Complainants’ Representative questions why the Provider continued to
index-link the policy and says that the annual statements failed to clearly state that the
Complainants had the option each year to cancel this indexation.
In her email to this Office on 28 January 2020, the Complainants’ Representative also
submits, amongst other things, that:
“… My parents did not understand that the purpose of Life Insurance is to protect
future income so it is no longer beneficial after retirement. Their mortgage was fully
paid when my father retired in 2000 and my parents no longer had young children.
They continued to pay into this policy out of fear. They thought it was something they
had to pay into for life. My father is 81 and my mother is 79. They are not educated
on financial products, nor do they use the internet …

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