Whole-of-Life Decision Reference 2023-0137

Case OutcomeRejected
Subject MatterWhole-of-Life
Date30 June 2023
Finantial SectorInsurance
Conducts Complained OfFees & charges applied (life),Failure to provide accurate investment information, Failure to provide product/service information
Decision Ref:
Product / Service:
Conduct(s) complained of:
Fees & charges applied (life)
Failure to provide accurate investment information
Failure to provide product/service information
On 13 September 1996 the Policyholders, Mr A. and Mrs B., incepted with the Provider, by
way of an intermediary, a “Joint Life, Last Death” unit-linked whole-of-life protection plan,
‘the Policy’. The Policyholders were the lives assured and the Policy was designed to
provide the death benefit sum assured, on the death of the last to die of the lives assured.
Mr A. died in 2011.
The Policy was transferred into a Trust in 1997. The Trustees in September 2019, ‘the
Complainants’, were Mrs B. and her children, Mr X., and Mrs. Y., who in 2011, had been
granted lasting power of attorney for the property and financial affairs of Mrs B.
The Policy was surrendered on 12 March 2020, at the Complainants’ request.
This complaint concerns the Provider’s suggested maladministration of the Complainants’
policy from October 2019 to April 2020 and the poor customer service it provided to them
during this six month period, including delays and poor communication.
The Complainants’ Case
The Complainants say that as of 13 September 2019, the Policy was providing life cover in
the amount of GBP £156,355.55 (one hundred and fifty-six thousand three hundred and
fifty-five UK Pounds and fifty-five Pence) and that at that time, they paid the annual
premium due of GBP £13,956.00 (thirteen thousand nine hundred and fifty-six UK Pounds).
- 2 -
The Complainants say the Provider wrote to them on 9 October 2019 to advise that
following a policy review on 1 October 2019, and based on the assumptions stated, they
would need to increase the annual premium, more than fourfold, to GBP £55,218.45 (fifty-
five thousand two hundred and eighteen UK Pounds and forty-five Pence) in order to
maintain the level of life cover throughout the lifetime of the life assured.
They were advised that alternatively, they could choose to maintain the existing premium
rate, by reducing the life cover to GBP £77,502.00 (seventy-seven thousand five hundred
and two UK Pounds).
The Complainants wrote to the Provider on 18 October 2019 to advise, among other
things, that:
“At the last review in 2014, I complained about the large increase in premium that
you were demanding. In an email to me dated 22 December 2014 … your Complaint
handler, gave me a breakdown of all projected premiums for this policy from 2014
up to the premium due on 1 October 2021. The estimated premium shown in the
projection I refer to, due on 1 October [2019] was £11,338.16 and we have paid a
premium demand of £13,956.36. This is 23% more than the projection.
For next year, which of course is after the review you have just undertaken, the
premium was estimated in your projection at £13,585.95. Nothing has
fundamentally changed with this policy but the premium increase in your review,
based on the sum at risk, is over 400%. How can this possibly be justified? Back in
2014 we made the decision to continue with this policy; largely influenced by your
projected figures. I accept they were not guaranteed figures, but a projection of
£11,338.16 which in the event has turned out to be £55,218.45 is beyond belief. It is
not a proposal that we could possibly agree to, even if we had the means to meet
the cost of the premium. We, the Trustees, are of the view that it is quite clear you
are attempting to force us to close this policy, after having fed it with over £90,000
in premiums since conception”.
The Complainants wrote to the Provider on 9 December 2019 to submit, as follows:
“The Trustees paid the annual premium due on 1 October 2019 on the undertaking
that it was providing life cover for the sum of £156,355.55. We have subsequently
been taken aback by the size of premium increase (approx. 400%), or benefit
reduction (approx. 50%), stated in your review letter of 11 October 2019. This
increase, I am sure you would understand, was not anticipated and has led us to
reconsider the suitability, and sustainability of this plan.
We, the Trustees, would ask you to offer us a meaningful settlement figure so that
we are in a position to cancel the policy. Due to the age of the life assured, I am sure
your actuaries will see the benefit of reaching a satisfactory settlement figure with

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