How do I claim for a mis-sold life insurance policy?
Key takeaways
Life insurance should be suitable for your individual circumstances, and you should be fully informed about all the terms and conditions on your policy
If you're seeking compensation, you need to compile a list of reasons why you believe the policy was mis-sold, and back them up with evidence. You can then set about filing, formal complaint to the insurer
If your complaint is unsuccessful, you can escalate the issue to the Financial Ombudsman Service after eight weeks
What is insurance mis-selling?
Insurance mis-selling is what happens when a policy is sold inappropriately, such as when key information is withheld, unsuitable cover is recommended, or customers are pressured into buying a policy.
Examples of insurance mis-selling
Being pressured into buying a policy within a certain timeframe such as during a mortgage application
Important policy details such as terms and conditions and exclusions not being communicated effectively
Not being told about other options and different policy type such as level term and decreasing term
Advice given may be poor, leading to excessive cover or the wrong type of cover
Being sold a policy that doesn't offer the promised returns or required level of cover - some policies may be structured in a way that makes it impossible to claim on them
When you purchase a life insurance policy, you have the right to expect that the product is suitable for your circumstances and that you're fully informed about its terms and conditions.
📣 Did you know? The Financial Conduct Authority (FCA) is the regulator in the UK which mandates that insurance providers act in the best interests of their customers. If an insurer fails to ensure that a policy is suitable or does not provide clear, accurate information, they may be found to have mis-sold the policy.
How can life insurance be mis-sold?
Life insurance should provide financial security for dependents in the event of the policyholder's death.
It is often sold alongside mortgages but it can sometimes be mis-sold.
For instance, a provider or financial adviser may have only discussed a ‘whole of life’ policy without explaining other options. This type of cover can be more complex and expensive than term life insurance.
'Term’ cover pays out if you die within a specified timeframe and is often more affordable. If you weren't informed about these cheaper alternatives, your life insurance might have been mis-sold.
Can I claim compensation for mis-sold life insurance?
Yes. If you believe your life insurance policy was mis-sold – and you have evidence to support your claims – you may be entitled to compensation.
How do I complain about mis-sold life insurance?
To make a claim for mis-sold life insurance, you’ll need to start by submitting a formal complaint to the insurer. You will need to explain why you believe the policy was mis-sold and include any documents or evidence that support your case.
1. Gather your evidence
Collect any paperwork and information that can support your claim, including:
· Policy number, start date, adviser/broker name (if you have one)
What you were told vs what you got (key facts, exclusions, costs)
Any evidence: emails, letters, call notes, suitability report, screenshots
2. Complain to the insurer first
The FCA says you should first contact the firm and keep a record of your correspondence. Use the provider's complaints channel such as web form, email, or post. Clearly state what went wrong, why the insurance was unsuitable or misleading, and what you want, whether that's a refund of premiums and fees, interest, cancellation, backdating, or correction.
3. Wait for the provider's final response (8 weeks)
For most complaints, the business has up to eight weeks to issue a final response.
4. If you’re not happy, escalate your complaint to the free-to-use Financial Ombudsman Service
If the insurer has failed to reply or hasn't offered a satisfactory response, submit your complaint to Financial Ombudsman Service using the online complaint checker forms.
5. Make a note of any key deadlines
You usually have to lodge your complaint within six years of the problem, or (if later) within three years of the date when you realised you had cause to complain.
After the insurer's final response, you typically have six months to go to the Financial Ombudsman Service (FOS).
Tips for making a mis-selling claim
Always send photocopies or scanned copies of important documents, not the originals
Keep a record of all correspondence and details of phone call
Maintain a polite and controlled demeanour throughout the process
Be persistent: claims can often be made up to six years after the mis-selling occurred
How long do I have to make a claim for mis-sold insurance?
You usually have six years from the date of purchase to make a claim for mis-sold insurance. However, the Financial Ombudsman Service (FOS) may consider a claim if there are exceptional circumstances.
What if my complaint is rejected?
If your complaint is rejected, you have the right to appeal to the provider. If the issue remains unresolved after eight weeks – or if you’re not happy with the insurer’s final response – you can escalate your complaint to the Financial Ombudsman Service.
The FOS is a free service that works to resolve disputes between a consumer and a financial services firm when they cannot reach an agreement themselves.
Just remember this: you must first give the insurer the chance to address your complaint.
What compensation can I get for mis-sold life insurance?
If your claim is accepted, you could receive a refund of all premiums paid for the duration of the policy, plus interest.
Should I use a claims management company?
Ideally, no. While claims management companies offer a ‘no-win, no-fee’ service, they will take a portion of any compensation awarded. Before going ahead, consider whether the support you get justifies the cost. Many mis-selling complaints can be made direct to the insurer and, if necessary, escalated to the Financial Ombudsman Service (FOS) for free.
Personal Finance & Insurance Expert
Our expert says
During 2024/25, the FOS received 305,726 new complaints for financial products, including life insurance. This is the highest record in six years. Of these complaints, approximately 34% were resolved in favour of the consumer.
The claims process is usually straightforward and consistent across financial providers, so you shouldn’t need help to initiate a claim. But you’ll need to stay the course to get your money back if you’re entitled to it.
Find life insurance you can trust
Historic mis-selling scandals have given rise to lack of confidence among some consumers. But the rules have been tightened significantly, and the vast majority of insurers and their policies are legitimate.
Life insurance policies can be extremely valuable under the right circumstances, and here at MoneySuperMarket we can help you find the right policy for your needs – at the right price.
To use our comparison tool, you simply need to provide us with a few details about you and your medical history and we will do the rest – helping to find the best deal for you.
Author
Esther Shaw
Money expert
Esther Shaw is an award-winning consumer, financial and property journalist with more than two decades of experience. As a freelance writer, she regularly contributes to a range of national titles...
Reviewer
Beth Leslie
Senior Insurance Content Editor
Beth is an experienced writer and editor who specialises in financial and economic content. She is currently the Senior Insurance Content Editor for MoneySuperMarket. Beth is passionate about making...
