Not upheld: claim cessation — policy term interpretation complaint against ReAssure Limited

Decision detail

Summary

Ms W complained that ReAssure Limited prematurely ceased her income protection benefit payments in October 2024 when she reached age 60, arguing her policy should continue until state retirement age (now 67). ReAssure relied on policy terms incepted in 1991 that explicitly specified age 60 as the benefit end date for female life assured. The ombudsman found the policy terms were correctly applied and that ReAssure had properly notified Ms W of the cessation date, including through a 2022 medical review and a two-week pre-cessation letter. Although Ms W raised vulnerability concerns and Consumer Duty arguments, the ombudsman determined that ReAssure fairly relied on the contractual policy terms and that Consumer Duty did not apply retrospectively to a 1991 policy. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Ms W's statement of acceptance references 'retirement age', the specific policy terms clearly define this as age 60 for female life assured, consistent with the national retirement age when the policy was incepted in 1991. The extension of state retirement age to 67 in subsequent years does not require ReAssure to extend the policy term retroactively. ReAssure properly assessed the claim against the correct policy terms, provided appropriate notice to Ms W as a vulnerable consumer, and fairly relied on the policy terms to cease payments. The Consumer Duty, which came into force in 2023, does not apply retrospectively to a policy agreed in 1991.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website