Zurich Assurance Ltd · DRN-5750335

The complaint Ms O’s complaint concerns a ‘Lifestyle’ reviewable term assurance plan taken out with Zurich Assurance Ltd. She’s feels that something went wrong at the time of sale, as Total Permanent Disability (‘TPD’) cover on an ‘own occupation’ basis isn’t covered when she’s paying for the ‘premier’ version of the plan. What happened I've outlined what I think are the key events and points involved in Ms O’s complaint below. Ms O’s Lifetime plan was taken out in 2004 and its benefits were reviewable. It provided life and critical illness cover of £136,000, at a monthly cost of £86.72 and waiver of contribution benefit was selected. Two versions of the Lifetime plan were available, the ‘high’ cover and ‘premier’ cover version. Ms O’s plan was set up on a ‘premier’ basis. And her sum assured has increased over the years at reviews, to just over £180,000 for the same premium. Ms O complained to Zurich after attempting to claim on the plan and finding out she didn’t have TPD ‘any occupation’ cover and Zurich sent its final response letter in early 2025. Across the complaint correspondence with Ms O and our Service, Zurich has said, in summary, that: • It consents to our Service consider Ms O’s complaint, even if this happens to have been made outside our timescales. • The sale was under its ‘simplified sales process’, which meant it recommended a product, having identified a protection need, without having to complete a fact find or issue a ‘reasons for recommendation’ letter. So there’s limited information available from the sale about what discussions took place. • Both versions of the Lifetime plan included the same ‘essential’ cover – there is no standalone ‘essential’ cover. That cover includes listed critical illnesses and the TPD ‘any occupation’ cover in Part A of the conditions covered. But, as reflected in Part B, under the ‘premier’ version of the plan TPD ‘own occupation’ cover could be selected as an additional benefit for an added premium when the plan was taken out which, if applicable, would be on the plan schedule. • As per the application form and schedule, Ms O didn’t take out TPD ‘own occupation’ cover, so she’s only covered for conditions in Part A. Her plan was set up as per instructions, the schedule confirmed the benefits and Ms O has kept the plan. • The ‘high’ cover version was designed to have a lower initial premium which would be reviewed and increase every year, whereas the ‘premier’ cover premium stayed the same unless increased as part of the five yearly reviews. • While it has provided policy documentation from the time, it hasn’t retained evidence this was sent to Ms O. The policy documents and covering letters are automatically produced and were sent to the address held for Mr O, which is still the same and to which it has sent policy correspondence since. It said that the information contained in the application form would have been relayed back to Ms O as part of the acceptance process, during which she would have been prompted to check it. • It recognised Ms O was concerned her occupation was incorrectly noted down on the

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application form, which has led her to question if other errors were made. It apologised, said its underwriting team had confirmed this had no impact on the plan and its benefits and that this doesn’t mean other mistakes were made. Unhappy with this, Ms O referred her complaint to our Service. She added that she opted for the ‘premier’ rather than the ‘essential’ option with a lower premium as she thought she’d get premier benefits, including TPD ‘own occupation’ cover. And if that had been included in the price then she would have selected it. Ms O said she didn’t receive policy documents – which have only been provided to her as part of the complaint – so she didn’t realise this hadn’t been added and just kept paying the premiums. One of our Investigators reviewed Ms O’s complaint and didn’t uphold it. Across the course of the correspondence they said, in summary, that based on the available evidence and what most likely happened, they weren’t persuaded Ms O had chosen to take out TPD ‘own occupation’ cover. They said that records show this wasn’t selected, the policy documents support that this and there’s nothing to suggest there were any other errors with the application process. It was likely the application form was relayed to Ms O and the policy documents sent to and received by her. And, if Ms O had felt that TPD ‘own occupation’ cover should have been added, and the schedule then didn’t reflect this, they’d have reasonably expected her to raise it with Zurich around the time. As well as on receipt of policy correspondence since, including statements sent to help Ms O check her benefits and whether the plan continued to meet her needs, which showed the additional benefits that applied with no reference to TPD ‘own occupation’ cover. Ms O didn’t accept this. She said she doesn’t understand what she has been paying for with ‘premier’ cover, when she’s getting the same benefits as if she’d paid less for the ‘high’ cover version. She said Zurich needs to show the additional TPD ‘own occupation’ benefit was clearly offered and explained to her, such that she understood what she’d be missing out on by not choosing to add this while still paying the ‘premier’ price. Our Investigator didn’t change their opinion. They said Zurich had explained there was no difference in the ‘essential’ conditions covered by both policy versions, Ms O’s ‘premier’ plan had the option to include TPD ‘own occupation’ though, which she didn’t do. While Ms O paid more for the ‘premier’ plan than she likely would have initially done if she’d chosen the ‘high’ cover, this doesn’t mean the ‘premier’ version was unsuitable for her. While the ‘high’ cover meant contributions started at a lower rate these would increase yearly, while the ‘premier’ premiums would remain the same subject to reviews. And there’s nothing to suggest the premium set was unaffordable for Ms O, nor the ‘premier’ cover version unsuitable for her. Ms O didn’t agree. She said Zurich hasn’t treated her fairly, as it hasn’t shown this information was fully explained to her and she doesn’t think someone would reasonably pay a higher premium for the same level of cover as another version with a lower one. Because no agreement could be reached the case has been passed 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. And, having done so, while I understand Ms O will be disappointed, I’m not asking Zurich to do anything for the reasons set out below, which are largely the same as those given by our Investigator.

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In deciding this complaint I’ve taken into account the law, any relevant regulatory rules including the principles and good industry practice at the time. While I’ve carefully considered the entirety of the submissions the parties have provided, my decision focuses on what I consider to be the central issues. The purpose of my decision isn’t to comment on every point or question made, rather it’s to set out my decision and reasons for reaching it. And, when doing so, given there’s limited information available from the time I’ve looked at what evidence we do have, and the surrounding circumstances, to help me decide what, on balance, I think is likely to, or should, have happened. It isn’t in dispute that Ms O had a need and desire for cover. Instead, the crux of the matter is that Ms O doesn’t think her particular plan was set up properly and that if it didn’t include ‘TPD own occupation’ cover then she may as well have chosen the cheaper ‘high’ version. Having considered this though, I think the nature of the plan and the two versions of it, as well as the benefits that could be added, was likely discussed with and explained to Ms O, and that she took out the ‘premier’ version without TPD ‘own occupation’ cover on that basis. And I’ve seen nothing to persuade me that the version Ms O took out, and the benefits attached to this, wasn’t suitable for her at the time. In terms of critical illness cover, the key features that I think Ms O was likely provided with explained that her illustration would show which additional benefits were included in her plan. And that, while benefits like waiver of contribution could be added to both plan versions, TPD ‘own occupation’ could only be included the ‘premier’ version for an added cost. Ms O’s policy terms also set out the illnesses covered and that TPD ‘own occupation’ cover only applied when reflected in the policy schedule or if subsequently added. And, while Ms O’s illustration said under ‘Additional Benefits’ that waiver of contribution benefit had been added, there’s no reference to TPD ‘own occupation’ having been selected. Ms O’s policy application form clearly said ‘no’ next to TPD ‘own occupation’ cover showing this hadn’t been selected, when waiver of contribution had. And, again, while Ms O’s policy schedule clearly said under ‘Additional Plan Benefits’ that waiver of contribution applied, it said that TPD ‘own occupation’ didn’t apply. So, based on the available information from the time, I think there was likely a discussion about the additional benefits Ms O could and should take out as part of her plan and that TPD ‘own occupation’ cover wasn’t taken out. I haven’t seen evidence to support that Ms O wanted, or her circumstances were such that she needed, this particular cover at the time. Instead, Ms O said that if this had been included in the price then she would have selected it, which I think reasonably explains why she didn’t do so given it would have attracted an added cost. And, if Ms O had instead thought, or been led to understand by Zurich, that she should take out and had selected TPD ‘own occupation’ cover then I’d have reasonably expected her to have queried why this wasn’t included in her plan documents at the time, or on her later receipt of statements which didn’t show this as an additionally included benefit. Ms O has said she didn’t receive the plan documents, but I think she was likely made aware she should expect to receive these and I’d have reasonably expected her to follow up with Zurich if she didn’t. Zurich has also said the policy documents are automatically produced and, given it had Ms O’s correct address and that she has received correspondence from it since, I think these were likely sent to and received by Ms O, even if she doesn’t recall this. And I’m not persuaded the two versions of the plan – including that the ‘high’ version would initially attract a lower premium but cover the same ‘essential’ conditions as the ‘premier’ version – weren’t explained to Ms O, nor that the ‘premier’ version she took out wasn’t suitable for her.

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The key features set out that there were two plan versions and that the ‘high’ version allowed a lower initial premium based on age and the plan term. And I think it needs to be remembered that both versions are reviewable in that the benefits would be regularly reviewed to see if these could be maintained by the premium in light of, for example, costs of cover which significantly increase with age. And, if these couldn’t be then a premium increase or reduction in the sum assured would be required. So, while premiums could start lower with the ‘high’ version, that would effectively weight the overall cost of cover towards the plan’s later years. Whereas the premium with the ‘premier’ version meant more of the cost of cover would be met from the outset, making the plan less likely to later require significant premium increases or reductions in the sum assured at reviews. So, Ms O’s plan being set up on a ‘premier’ basis meant negative changes were less likely. And, in fact, I note that Ms O’s reviews have resulted in an increased sum assured for the same premium. In my experience, given the nature of this type of plan and knowing how these were sold, I think the two versions of it and its reviewable nature would likely have been explained to Ms O and that she took out the ‘premier’ plan in that knowledge. And I think this is supported by the key features which discusses these, as well as by the policy terms which explain the reviewable nature. On balance, there isn’t enough to persuade me that Ms O was misinformed about her plan and its benefits or that this wasn’t suitable for her needs at the time, even if she now feels differently. It isn’t in dispute that Ms O had a desire and need for cover and that the ‘premier’ version was affordable for her. And, as I’ve said, I think it’s likely Ms O took this out as it meant that in exchange for an affordable premium it was anticipated that her sum assured, and protection needs, would likely be supported for longer. My final decision For the reasons given, I’m not asking Zurich Assurance Ltd to do anything. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms O to accept or reject my decision before 6 April 2026. Holly Jackson Ombudsman

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