Partially upheld: inadequate information provision and policy review calculation errors complaint against Phoenix Life CA Limited

Decision detail

Summary

Mrs P complained about Phoenix Life's administration of her whole of life insurance policy taken out in 1992, particularly regarding a drastic premium increase proposed in the 2021 review. She argued the policy was mis-sold because she was not informed that the sum assured was only guaranteed for 10 years and that costs would eventually exceed premiums. The ombudsman found the policy was suitable at sale and not mis-sold, but identified that Phoenix failed to provide clear information about rising policy costs from 2015 to 2019. However, the ombudsman concluded this information failure would not have changed Mrs P's decision to maintain the policy. The complaint was partially upheld due to calculation errors in the 2021 review, and Phoenix was ordered to pay £250 compensation and provide a corrected review letter.

The Ombudsman's reasoning

The ombudsman found the policy was suitable at the time of sale based on Mrs P's circumstances and need for family protection. While Phoenix failed to provide sufficient information about policy costs from 2015 to 2019, the ombudsman concluded this would not have changed Mrs P's decision to keep the policy, as she valued the cover for estate planning purposes and would not have proactively made changes while the existing premium could still provide cover. The 2021 review calculation errors warranted compensation for distress and inconvenience.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website