Broker error on my late husband’s life insurance cost me our home

My husband and I took out two life insurance policies with Legal & General through the broker LifeSearch in 2014 to cover a mortgage, buying what we thought were identical policies on the same day for the same amount of cover — £390,000 — for the same purpose with the same adviser. My husband died, aged 53, on December 27, 2022, leaving me a widow with two teenagers.
Legal & General has still not settled the claim. I have logged a complaint about its service and I do hope I will get a decision soon.
In addition LifeSearch did not make the policies like for like. My policy is indexed, my husband’s is not. I only found this out after he died. If I had died first then about £130,000 more would be paid out. I complained about this to LifeSearch and after eight weeks it said it could not resolve it yet and I have the right to go to the Financial Ombudsman.
You first wrote to me in June last year. You and your husband had bought life insurance to cover the mortgage on your home in Ireland. When your husband lost his job in 2010 you both moved to Britain to find work but kept the property in Ireland, renting it out. You subsequently missed two consecutive payments for your life insurance so your original policies were cancelled and you had to buy new policies through LifeSearch in 2014.
Your husband suffered from depression, which meant the premiums for his life insurance were more expensive. You were completely honest about this when applying for life insurance and you both wanted index-linked policies, where the cover would rise in value in line with inflation.
When your husband died of intestinal ischemia two days after Christmas, having suffered a stroke earlier that month, you were shocked to discover that his life policy would not pay enough to cover the mortgage in Ireland. To add to the pain, six months later you were still waiting for the payout.
The process of getting information from doctors can be agonisingly slow and I could see from the correspondence between Legal & General and yourself that the insurer had to approach your husband’s GPs in Britain and Ireland. However, I could not understand the lack of indexation on the policy sold to your husband.
Legal & General said: “At the time, any application which required a rating or was outside standard terms [because of your husband’s depression] would not have had the option to be index-linked. This was an advised customer and the preference of the advice firm, LifeSearch, was for communication to go through it. Therefore, we sent the offer letter through the adviser.”
I asked LifeSearch why you and your husband had not been informed about the lack of indexation on this policy. LifeSearch said that while it had “presumably” received a document from Legal & General confirming that the policy would not be index-linked, no copy of this was attached to your husband’s file. To make matters worse, when the policies started in March 2014, LifeSearch sent an email to your husband which said “I’m pleased to tell you that as agreed we have started both your Index-Linked Term Assurance policies on 28/03/2014”.
Eight years on the company told you: “Regrettably it appears that Legal & General’s removal of indexation was not picked up by us at the time. I’m very sorry for this oversight.”
LifeSearch offered to refund the commission it was paid for selling your husband his policy, which came to £1,336.60, plus 8 per cent interest on that amount since April 2014 — a total of £2,450. But this does not make up for the fact that he was not given the chance to look for an alternative policy which did include index-linking. Your index-linked policy provided cover for £522,000 in December 2022 when your husband died, compared with the £390,000 provided by his policy.
LifeSearch said: “We are sorry to hear about the bereavement and the problems she has encountered. We were able to find [her husband’s] insurance cover despite pre-existing conditions but the insurer declined to offer indexation. The insurer has confirmed this was outlined in the policy documents, although we accept that the adviser miscommunicated this to him and we apologise for the confusion caused. It is worth noting that if indexation had been applied to the policy the monthly premiums would have been much higher. Overall, the policy was the right one and we are pleased it is paying out.”
I advised you to take your complaint to the Financial Ombudsman Service and last week you got the final ruling. The ombudsman said that the choice of an index-linked term policy was suitable for both of you and that her investigations indicated that alternative index-linked policies were likely to have been available back in 2014, but she still did not “think it would be fair to hold LifeSearch responsible for any financial loss”.
“I say this because, during the nearly nine years the policy was in force, there were a number of opportunities for [the couple] to identify that [his] policy wasn’t what they thought they’d bought and, therefore, to mitigate any potential losses,” the ombudsman said.
These opportunities include an invitation in 2018 from LifeSearch to review the “index-linked” policies.
I find this ruling incomprehensible. Yes, you and your husband should have checked the policy documentation sent to you. But ultimately this is a problem caused and compounded by LifeSearch. It was paid to find you both index-linked life insurance policies. It failed to do this in your husband’s case, then failed to notice its mistake until your husband died and it was too late to correct the error. Then it failed to compensate you.
Finally the ombudsman, which was set up specifically to support consumers who have been let down by financial institutions, has itself let you down.
You bought life insurance in case the worst happened. It has indeed happened but the resulting shortfall in payout means that you will still have to sell the only home you and your husband owned together.
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I took out a contract with BT for full fibre broadband in November 2022. I was led to believe that it would be installed by Christmas. After much chasing, changed appointments, an engineer failing to show up and me lodging a formal complaint, the service was completed and went active on June 26, 2023. During this period I had broadband with another supplier, although that was costing me more.
That was only the beginning. The contract was for a fixed period with the first six months offered free, so the charge should have started to run from December 26, 2023. BT charged from the outset. I complained but got nowhere.
Soon I was getting letters from BT threatening disconnection for non-payment of bills and applying late payment charges when I didn’t owe a penny. Thank heavens I hadn’t set up a direct debit.
BT terminated my broadband service on December 4, 2023. I contacted the billing team the following day by WhatsApp and was told that this should never have happened.
By December 18 reconnection hadn’t happened. BT invoiced me for about £1,000 in early termination charges and started sending letters threatening debt collection. I started another WhatsApp conversation with the billing team and in an exchange lasting more than three hours, ended up being offered a new contract at current prices, ignoring the original contract, which BT had breached in every possible way. Not surprisingly I went elsewhere and arranged a temporary, immediate service with another supplier followed by a fixed contract with Vodafone.
This was far from the end of it as BT instructed debt collectors who inundated me with letters, texts and emails demanding £2,502 — and a law firm followed up in April.
I took the matter to the ombudsman at the beginning of March. BT offered no evidence or response and the ombudsman found in my favour. Had BT implemented the ombudsman’s decision and sent me the paltry amounts awarded — £100 for goodwill and £10 for the missed appointment — I might have been inclined to call it a day … but BT hasn’t even done this.
I asked BT to open your case again. After a week BT said it was sincerely sorry and admitted that the service you received was “not up to our usual standard”.
Apparently your initial broadband order was incorrectly cancelled by Openreach, but everything that has happened since is BT’s fault. BT said: “The customer’s account has now been closed, all termination charges waived, and there will be no impact on his credit file.”
BT is paying you £315 in total, including three months’ line rental.
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My mum died at Christmas and I have had the difficult task of dealing with her estate. Everything except one last job of getting a refund of her account balance from British Gas has been sorted. It is difficult enough having to speak to people about this but five lots of contact including a letter more than three weeks ago to the chief executive has resulted in nothing happening.
The account has been closed and the balance shows as £0. But the last statement clearly shows that a refund is due and the telephone team have confirmed this.
I have been promised the refund three times. The service and lack of empathy from the call centre is appalling. I would hate anyone else to have to go through what I have and feel this needs highlighting so that British Gas makes changes.
As part of winding up your mum’s estate, you sold her home and it seems the buyers were a bit quick to change energy suppliers. The new firm took over on May 23 but completion didn’t take place until the next day which is when you tried to supply final meter readings to British Gas.
Because your mum’s account had already been closed, you could not key in the meter readings online. British Gas had to wait until the new owners had supplied a reading to their supplier (which in turn gave them to British Gas) to issue you a final bill.
Even then it delayed, but after a prod from The Sunday Times, it compared the two readings and applied a credit to your mum’s account for the energy used by the new owners that you would otherwise have had to pay for.
It has now refunded £185 and paid you £75 compensation.
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