The Insurance Ombudsman is investigating 14 complaints by Irish Life policyholders regarding review clauses in life assurance policies sold in the 1980s.

These cases have arisen following a review of more than 60,000 policies beginning last year. Some 13,000, or one in five of the policies reviewed, require an increase in premium or decrease in the level of cover and Irish Life has begun notifying policyholders in the last few months.

The policies in question are open-ended protection policies which were marketed under the name Lifesaver. At the outset customers had a choice of what level premium they wished to pay based on how much cover they required. The policies incorporated a savings element and were to be reviewed after 12 years or 10 years. However these reviews were not carried out in the 1990s and some of the policies ran into negative value as the fund was eaten up by the increasing cost of life cover.

Mr Bill Hannan, chief operating officer of Irish Life Retail, said the policies were very flexible and provided the highest level of life cover at the lowest possible cost during the important family rearing period.

He said the premium was credited to an investment account and each month the cost of the life assurance was debited from that account.

"The cost of the assurance increases with age. In the early years the premium paid exceeds the cost of cover and the investment fund builds up. In later years the cost of cover exceeds the premium and the fund is depleted."

Mr Hannan said that customers did not lose out due to late reviews as Irish Life had borne the cost of providing cover for the intervening period.

This type of policy is still being sold and is a major category of business throughout the industry. But many Irish Life policyholders who took out policies more than 10 years ago did not realise that their policies might have no encashment value and were unaware that a review could lead to premium rises of more than 100 per cent.

The possibility of an increase in premium was spelt out in the original sales literature. "This amount of cover is guaranteed for 12 years for your current level of contribution. If you wish to maintain this level of cover after the period your contribution may have to be increased," it said.

But it is the extent of the increases and the delay in undertaking some of the reviews that has angered customers. Some of them expressed their anger on RTE Radio 1's Marian Finucane show yesterday.

Irish Life is currently dealing with a number of complaints internally and if customers are not happy with the outcome of their case they are entitled to bring their complaint to the Insurance Ombudsman.

According to Ombudsman Ms Caroline Gill, policyholders can only take their complaint to her office when internal procedures have been exhausted and the customer has what is called a signing off letter.

Ms Gill has been in contact with Irish Life and has confirmed that no increase in premium will be made in the cases currently under investigation.