Not upheld: unfair policy review outcome and premium increase; alleged failure to notify of qualifying policy rule changes complaint against Zurich Assurance Ltd

Decision detail

Summary

Mr and Mrs H complained about a 2025 review of their whole of life insurance policy with Zurich Assurance Ltd, which resulted in either a significant premium increase from £190.65 to £339.37 monthly or a reduction in sum assured from £162,515 to £128,944. They argued the outcome was unfair, that they had been told the sum assured wouldn't change, and that Zurich should have notified them earlier of changes to qualifying policy rules. The ombudsman found that the policy terms permitted reviews with changes, that Zurich's revision of investment growth and mortality assumptions was reasonable and required by regulation, and that Zurich had no prior reason to believe premiums would exceed the qualifying policy threshold. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the policy terms clearly permitted reviews with changes to sum assured or premiums. Zurich's revision of investment growth and mortality assumptions was not unreasonable as they had a regulatory obligation to ensure assumptions accurately reflected actual performance. Providing more accurate information through revised assumptions was fairer than allowing outdated assumptions to persist, which could lead to even more significant changes later. Regarding qualifying policy rules, Zurich had no prior reason to believe premiums would exceed the £3,600 threshold and therefore had no obligation to notify Mr and Mrs H earlier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website