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Double life insurance – what to disclose?

The insurance policies 

Hannah and her husband Harry saw a broker, Mary, about their health and life insurance. Mary suggested that Hannah and Harry split their life insurance across two insurance companies, so that they could get the level of cover they required. 

When a health insurance claim was declined, Hannah and Harry decided they no longer wanted Mary as their broker. They instructed a new broker, Janet. 

Janet reviewed the couple’s insurance. She told Hannah and Harry that because the two life insurance companies did not know about the existence of the policy held with the other company, both companies may not pay out on a claim upon either Hannah or Harry’s deaths. 


The complaint 

Hannah and Harry tried to contact Mary to question her about the advice she had given to split their life insurance, but could not get through to her or Mary’s manager, Sophie, despite messages being left. Hannah and Harry were worried that they had been paying for a life insurance policy that may not actually have covered them in the event of death. 

Hannah then contacted FSCL. We referred the complaint to Sophie. 

Sophie sought letters from the two insurance companies to confirm that non-disclosure of the insurance held with the other company would not affect any claim. 

The insurance companies both confirmed that the non-disclosure would not preclude any claim. Sophie also sent an email to Hannah and Harry apologising for any inconvenience caused. 



As it was clear Hannah and Harry had suffered no financial loss and had been provided with an apology, we decided the complaint was outside our jurisdiction, and declined to investigate further. 

Hannah and Harry confirmed they had ended their relationship with Mary and Sophie in any event, and decided they would withdraw the complaint. 


Lesson to be learned 

You can insure your life for any sum you choose. In this way, life insurance is not the same as other types of insurance, such as income protection or loan repayment insurance. With insurance other than life insurance it is important to disclose any other insurance policies you may hold which provide cover for the same events. 

If you have any doubts about your insurance, always speak to your broker or directly to the insurance company, and ask to be provided with any advice given to you, in writing.