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Double life insurance

Robert first took out life insurance in 2006. In 2012, he met with a new adviser who suggested that he broaden his cover and move to a new insurer. Robert assumed that the new adviser would cancel his existing life insurance dating back to 2006, but the adviser did not do so.

Despite annual confirmation of cover and the premiums being taken out of his account by both insurers, Robert did not notice that he had two life insurance policies.

In 2018, a new advising company purchased the client book of Robert’s 2012 adviser. The double insurance error was identified in March 2022 upon an insurance review.

Robert had paid premiums to his original life insurance policy provider of approximately $17,000 over the previous 10 years. Robert asked the new advising company to compensate him for his loss, but they declined to do so. Robert complained to FSCL.


Robert said that the adviser in 2012 was negligent when he did not cancel the original cover. Robert considered that the new 2018 advisers should compensate him as they had purchased the client book from the 2012 adviser.

The new advisers could not confirm the cancellation process from 2012 due to it being six years before acquiring the clients, and they had no control over that process. They said they did not know Robert was paying for two policies as they were not receiving trail commission in relation to the original policy, and so did not have the opportunity to correct the error. Further, the advisers said that Robert had had the benefit of both policies for 10 years if he needed to make a claim. Finally, the advisers said that FSCL could not investigate Robert’s complaint because our terms of reference say that we cannot consider a complaint where more than six years have passed from the date the consumer should have reasonably become aware of the issue.


Typically, when a client replaces one policy with another, the adviser will ensure that the original policy is cancelled. The adviser from 2012 had shortcomings in their service in this regard.

However, by not noticing the fortnightly premium payments and the confirmation of cover letters from the first insurer, Robert had contributed considerably to the ongoing issue. We agreed with the new advisers that Robert could have reasonably noticed the error more than six years ago, and decided we were unable to investigate the complaint.

The new 2018 advisers could not have reasonably discovered the error. Even if they had conducted the insurance review earlier when they acquired Robert as a client in 2018, they may not have identified the issue, as Robert himself had not noticed he had two policies.


We suggested that Robert should discontinue his complaint.

Robert did not reply to the preliminary decision, so we discontinued our investigation.

Insights for consumers and participants

Consumers should check that their previous insurance policies are cancelled when they take out new policies. It is also important to read renewal notices and keep an eye on bank statements to make sure they are not paying for a policy they no longer need or want.

Advisers should be careful to ensure that a client’s previous policies are successfully cancelled upon taking out new policies.