Whole-of-life policy review results in increased premiums

Whole of life assurance Life Assurance Insurance

Carlos was told he'd have to pay an increased premium or reduce the life cover provided. We found the business hadn't made it clear that could happen when it sold the policy.

What happened

Carlos started a whole-of-life policy to provide life assurance for his wife and children, expecting to pay for it until his death.

After 10 years, the business carried out a review of the plan. It told Carlos that he’d have to double his contributions to maintain the same level of cover or reduce the life cover provided by the plan if he wanted to keep paying the same premiums.

Carlos complained that he hadn’t been told when the policy was sold that it would be reviewed and that he might be asked for more money. The business said: ‘the potential for reviews was disclosed in the policy conditions’.

How we helped

We examined the paperwork and found that he’d been given several documents, some of which didn’t apply to his policy. Some paperwork gave the impression that the premiums would be ‘level’ in the future, rather than being altered.

The potential for reviews was mentioned in the policy conditions. But it wasn’t given any prominence, or explained clearly and in a way that Carlos could have understood easily. There was no mention of the reviews in the rest of their correspondence.

Putting things right

We upheld the complaint because we hadn’t seen enough evidence that the business had made Carlos aware of the reviews and their implications.