People who had taken out mortgage protection insurance realised in 2002 they were paying a premium even though the mortgage had been redeemed in 1994. They sought a refund.

The Ombudsman said a mortgage protection policy did not necessarily depend on the existence of the mortgage to which it had been originally associated. When the mortgage is closed the policyholder is free to continue or cancel the policy.

In the case in the complaint, the benefit would have been paid if either of the persons assured had died and the complainants had not told the company to discontinue the policy. Furthermore, the company had no way of knowing the mortgage had been redeemed.

The Ombudsman could not, therefore, support the complainants' request for a repayment.