Phoenix Life Limited · DRN-6210507

The complaint Mr and Mrs K complain about an insurance policy that was cancelled by Phoenix Life Limited. What happened In May 2025 Mr and Mrs K complained to Phoenix when they attempted to make a claim under a critical illness policy but were told that it had been cancelled in 2018. Phoenix said the policy had been cancelled in 2018 when Mr and Mrs K had spoken with them about being overinsured and wanting to reduce their premiums. In 2018 there were a total of three policies in place. The policy that had been taken out most recently in 1999, and the one which was the most expensive, was the one that was cancelled as Phoenix agreed it wasn’t suitable. So the premiums paid, along with added interest, were refunded. Mr and Mrs K said it hadn’t been made clear at the time that the critical illness cover had been cancelled. Mr and Mrs K brought their complaint to our service where one of our Investigators looked into what happened. Whilst sympathising with the situation they didn’t uphold the complaint saying whilst in hindsight cancelling one of the original policies might have been preferable, Phoenix had given enough information to understand the difference between the policies. Mr and Mrs K disagreed saying the wrong policy had been cancelled. Because an agreement couldn’t be reached the matter has come to me for a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr and Mrs K have provided a lot of information about their complaint and it’s clear how strongly they feel about what happened. I want to assure them that I’ve read and considered everything that has been submitted even if I don’t mention it all in detail. I’ve summarised some things which reflects the informal nature of our service. Firstly I’d like to say that I’m sorry to hear about Mrs K’s diagnosis. It’s clear this has understandably had a strong emotional impact on her and her family. And I know that the situation with the policy has added unwanted stress and worry at an already concerning time. The issue here stems from what happened in 2018 when the policy was cancelled. Phoenix say they cancelled the right policy, but Mr and Mrs K say it was the wrong policy. I don’t have access to the telephone calls from 2018 when the issue was raised. Due to the passage of time, and the length businesses keep records this isn’t unusual or unexpected. Records from Phoenix show that contact was made in 2018 because Mr and Mrs K thought

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they were overinsured and also wanted to reduce their premiums. At that time in 2018 there were three policies in place. Mr and Mrs K each had a life term insurance policy in their individual names which had been taken out in 1997 to cover their mortgage. The third policy was a life policy which included critical illness and had been taken out in 1999. Mr K was the policyholder with Mrs K as the life insured. In 2018 the third policy had a monthly premium of just over £137, which had increased substantially from when it was taken out in 1999. Both of the original policies had a combined total monthly premium of around £91. So the third policy was, in 2018, considerably more expensive than the others, and only provided cover for Mrs K. Phoenix looked into the concerns raised by Mr and Mrs K about being over insured. They said the two original policies were suitable as they had been taken out to cover the mortgage. However they thought the third policy was unsuitable due to the existing cover already in place. To put things right Phoenix offered to refund the premiums paid, as well as adding interest, since the third policy had been taken out. This was a total of £18,915.77. The final response letter confirmed the number of the policy that was being cancelled and said cover would no longer be provided. It also said that there had been a phone call where Mr K confirmed he was happy with the investigations. The letter included the warning If you are unsure about what to do I would strongly suggest that you seek independent financial advice before deciding whether to accept my offer. Attached to the letter were several documents including the proposal, fact find, policy illustration, key features document, as well as the most recent annual statement. These documents included the details of cover (life and critical illness) as well as showing the policy number. Prior to this in July and August 2018 Phoenix had also sent Mr K copies of documents showing the policy number and level of cover for both life and critical illness. Taking into account all that happened in 2018 I’m satisfied that the correct policy was cancelled and that Phoenix made Mr K, as the policyowner, fairly and reasonably aware this was happening. Mr K also signed the decision form saying that he had read and understood the letter before signing. The third policy was the most expensive and since the intention of making contact with Phoenix was to reduce the premiums, it seems to make sense that this was the policy which was cancelled. This is alongside the issue of Mr and Mrs K saying they were overinsured and they had raised concerns about how the third policy had been sold. Without the benefit of hindsight I’m not persuaded that there was an intention of cancelling one of the original policies in 2018. The original policies were cheaper and continued to provide life cover for the mortgage which was the reason why they were taken out in 1997. I’m persuaded that the correct policy was cancelled, that Phoenix made Mr K reasonably aware of this, and that he was offered the option of taking independent advice if he was unsure about the decision. Having carefully considered everything that happened I’m satisfied Phoenix acted fairly and reasonably so won’t be asking them to take any further action. I know this will be disappointing for Mr and Mrs K and I don’t underestimate the impact this situation has had on them however the policy was cancelled so cover is no longer in place.

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My final decision For the reasons explained above my decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K and Mrs K to accept or reject my decision before 15 April 2026. Warren Wilson Ombudsman

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