This is the fourth of the examples provided by the ombudsman, which we have listed here.

Endowment policy extending into retirement

A couple took out an endowment policy in 1992 on the advice of a life company representative. They complained in 2000 when they realised the policy would extend for 3 years into the husband's retirement.

Complaint upheld. The ombudsman said an endowment policy had not been inappropriate for this couple, given their attitude to risk. However, the advisor had not considered the fact that the policy would still continue after retirement, when mortgage payments would take up over 50% of their net income.

Amount of compensation

Otherwise the policy was suitable. So the ombudsman asked the firm to reconstruct the policy so that it would mature in the year when the husband retired. The firm quoted a revised premium, which the couple agreed to pay. This was the amount which they would have been paying if the policy had been set up like that from the outset.

The firm made good the difference between the original and revised premiums to date.