Not upheld: Other regulated complaint complaint against Liverpool Victoria Life Company Limited

Decision detail

Summary

Mrs L complained that LV incorrectly paid the death benefit from a joint life Pension Term Assurance policy to her ex-husband's second wife (Mrs L2) rather than to her, despite being named on the policy. The ombudsman found that PTA policies are governed by pension scheme rules giving the administrator discretion to pay death benefits to financial dependants, not automatically to named policyholders. Following Mrs L and Mr L's 2015 divorce with a clean break order, Mrs L was no longer financially dependent on Mr L, whereas Mrs L2 was his sole financial dependent. LV conducted a thorough investigation and reasonably exercised its discretion in paying the death benefit to Mrs L2. The ombudsman found no evidence supporting Mrs L's claims that LV had guaranteed her the death benefit or that an undocumented agreement existed regarding the policy. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that PTA policies are written under pension scheme rules which give the scheme administrator discretion to pay death benefits to financial dependants, not automatically to named policyholders. Being named on the policy did not entitle Mrs L to the death benefit. The death benefit did not form part of Mr L's estate (to avoid inheritance tax), so his Will was only considered as an indication of his wishes. The divorce clean break order severed all financial dependency between Mrs L and Mr L, whereas Mrs L2 was established as Mr L's sole financial dependent. LV reasonably identified financial dependency as the key criterion and properly applied the evidence in determining that Mrs L2 met this test while Mrs L did not. Mrs L provided no documentary evidence of the alleged agreement with Mr L regarding the PTA policy. The ombudsman found no evidence in the fourteen call recordings that LV guaranteed Mrs L would receive the death benefit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website