Whole-of-life policy reviewed and changed without customer's knowledge

Whole of life assurance Life Assurance Insurance

Our investigation found that the business had notified the customer, but due to having an old address, she didn’t receive the letter. She also claimed she was unaware of plan reviews, but the evidence suggested otherwise.

What happened

Francesca had a whole-of-life policy. When she realised she hadn’t heard from her policy provider for some time, she contacted them. During the conversation, she found that they’d reduced the lump sum that would be paid on her death.

The provider told her that the policy had been reviewed three years earlier, and that they’d written to let her know that she’d needed either to increase her premiums or reduce her level of cover. They said when they hadn’t heard from her, they’d assumed that she’d wanted to keep her premiums the same and reduce the level of cover.

It later came to light that Francesca hadn’t received any letters from the provider because they had her old address on its records. While she accepted she hadn’t asked the provider to update her address, Francesca complained that she didn’t know that it could review the policy. She also complained that it shouldn’t have made any amendments until it had contacted her. When the provider rejected Francesca's complaint, she referred the matter to us.

How we helped

We wanted to establish whether it would have been reasonable for Francesca to have realised that her policy would be reviewed. So we looked at the documents that she’d been given when she took out her whole-of-life policy. In our view, these did explain the review process clearly.

In addition, we found that Francesca had taken out the policy shortly after the review of another reviewable policy that she’d taken out previously. So we were satisfied that Francesca should have realised that her policy would be reviewed.

We were also satisfied that the provider had fulfilled its obligation to let Francesca know that her policy had been reviewed, and the results of that review. In the letters it had sent her, it made clear what action would be taken if she didn’t respond to its letters.

It wasn’t the provider's fault that it had written to Francesca's old address. And we didn’t agree with Francesca's argument that the provider shouldn’t have made any changes to her policy without her explicit consent.

Putting thing right

Francesca's provider re-assessed the situation. As her health hadn’t changed since she took out the policy, it agreed to reinstate her original level of cover. It asked her to pay the necessary premium increases backdated to the date of the review. Francesca accepted this proposal.