Years later, the premiums were becoming unaffordable for Delia and she reduced her insurance. Delia then complained to the bank that she was initially over-insured. She wanted excess premiums refunded but the bank declined.

Our investigation

Due to the passage of time since the insurance had been taken out, it was difficult to determine what had happened when the insurance was sold. But looking at Delia’s stated insurance goals, we concluded she would have needed cover of $200,000 to meet her goal of repaying her debts if she died. With her life insurance and loan protection insurance, she had cover of $250,000 - $50,000 in excess of her needs.

In light of our views, the bank offered to reimburse Delia $4,000 to cover the extra premiums she had paid for the extra $50,000 insurance.

Outcome

Delia accepted the offer.