Grieving family turn to watchdog after insurer underpays on life policy

Father had been paying for two decades so children would get sum when he died

The Financial Services and Pensions Ombudsman intervened on foot of a complaint from the dead man’s family. Photograph: iStock

The Financial Services and Pensions Ombudsman intervened on foot of a complaint from the dead man’s family. Photograph: iStock


An insurance company only agreed to fully pay a grieving family their father’s life policy after the State financial services watchdog intervened.

The father had been making premium payments to the insurer for two decades so that his children would get a lump sum when he died.

When his policy came up for review early last year, he was told he would have to increase his payments to maintain the agreed lump sum. But he agreed to stick to his existing payments on the assurance that the lump sum would remain the same for another year, before it would reduce.

When he died a short time afterwards, the insurer said it was paying out the reduced sum, even though he had passed away within the year.

Ger Deering, the Financial Services and Pensions Ombudsman, intervened on foot of a complaint from the dead man’s family, and eventually the insurance company agreed to pay them more than €122,500 after having initially underpaid on the life policy. This sum included €79,000 underpaid on the lump sum, a refund in premium payments made shortly before he died and compensation.

The complaint was one of 5,588 made last year to Mr Deering’s office, which offers free mediation and investigations to customers in disputes with their financial services or pension providers.

Serious illness policy

In another case, an insurance company eventually paid €223,463 to a customer who couldn’t work any longer and was claiming on his serious illness policy.

The insurer had initially refused the claim, disputing the medical evidence, before backing down during a mediation process brought by the ombudsman.

Further cases include a couple being awarded compensation of €1,500 from a mortgage provider over its “exceptionally long” delay in handing over their house deeds when they were switching to another lender and a man compensated €1,000 after incorrect advice from his pension provider.

A third of the complaints made to Mr Deering last year were about insurers. Around 368 of them related to an insurer’s refusal to pay out on a claim.

Irish Life was named as the worst in a league of companies against which the watchdog upheld complaints. The life assurance and pensions firm had 26 complaints against it either upheld, substantially upheld or partially upheld during 2018.


The bulk of them (19) related to Irish Life itself, while seven further complaints related to its health insurance arm Irish Life Health.

Bank of Ireland had eight complaints overall against it fully, substantially or partially upheld, Permanent TSB had six, Allied Irish Bank and Aviva had five each, Zurich had four and AA had three.

The majority of all complaints (56 per cent) related to banks, with mortgage complaints making up almost a third received by the office during its first full year in operation since the merger of the Office of the Pensions Ombudsman and the Financial Services Ombudsman’s Bureau.

Mr Deering said complaints about being refused a tracker mortgage make up a large number of those, and that he expects to resolve a significant proportion of them over the coming year.

Some 6 per cent related to pension schemes and another 5 per cent to investment products.

Mr Deering admitted his office was slower than it would like to be at resolving cases because of the increasing number of complaints being made, but added that an imminent increase in staff from 55 to 90 would help cut the backlog.