Not upheld: Service failures generally complaint against Zurich Assurance Ltd

Decision detail

Summary

Mr L complained that Zurich cancelled his life insurance policy without proper notification while he was hospitalized. A February 2025 direct debit payment failed, and although Mr L reinstated the direct debit for a double payment in March, that payment also failed. Zurich sent notification letters in February and May 2025 about the arrears and cancellation. Mr L requested reinstatement on 12 May 2025, but this was outside the 90-day reinstatement window from the first missed payment on 1 February 2025. The ombudsman found that Zurich adequately notified Mr L of the payment issue and its consequences, and that Mr L's failure to maintain premiums meant the policy was correctly cancelled in accordance with the policy terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Zurich adequately notified Mr L of the unpaid premiums through the February 2025 letter, which clearly stated the consequences of non-payment. Although Mr L was unwell, he demonstrated awareness of the payment issue by proactively contacting Zurich to reinstate the direct debit. The ombudsman considered it reasonable to expect Mr L to follow up when the March payment failed, particularly given he had arranged for a double payment. The policy terms clearly allowed cancellation for non-payment, and Mr L's failure to maintain premiums meant Zurich acted within its rights. The ombudsman rejected the argument that Zurich should have used alternative contact methods (email or phone), finding the automated letter process reasonable given the volume of policies. The ombudsman also noted that even if Mr L had enquired within the 90-day reinstatement window, a health declaration would have been required, which may have prevented reinstatement due to his current health situation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website