Partially upheld: Travel / life insurance claim disputes complaint against Howden Employee Benefits & Wellbeing Limited trading as Howden Life & Health

Decision detail

Summary

Mr D complained that Howden mis-sold him three income protection policies in April 2024 that provided approximately £6500 monthly benefit, despite his disclosure that his employer was planning a merger. After the merger, Mr D was made redundant and his claims were rejected because he was ineligible due to his prior knowledge of the merger. Howden accepted the mis-sale and offered a full premium refund with 8% interest plus £1500 compensation, but Mr D sought an additional £78000 for lost income. The ombudsman partially upheld the complaint, finding Howden's original offer fair but directing it to also provide a letter explaining the cancellation was due to adviser error, which Mr D could show to future insurers to mitigate application impacts.

The Ombudsman's reasoning

The ombudsman found Howden breached its regulatory obligations by selling policies Mr D was ineligible for, despite his disclosure of the merger. While the premium refund with interest was fair compensation for the financial loss, the ombudsman determined that Mr D's claim for lost income compensation was not sufficiently supported because alternative mitigation options (such as seeking different employment, adjusting financial planning, or seeking redundancy packages) remained available to him even with the policies in place. However, the ombudsman recognised that Howden's error caused material distress and inconvenience through unnecessary claims paperwork and JSA requirements, and that a letter explaining the adviser's error would fairly mitigate future insurance application impacts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website