Bank upfront with increasing size of life insurance premiums

Categories:
Insurance policies,
Summary:
In 2006, Frank and his partner approached their bank about a small business loan. The bank approved the loan application and also recommended life insurance. Frank and his partner both took out life insurance policies. By 2021, 15 years later, Frank's life insurance premiums had more than tripled.
Published:
July 2022

Frank said the premiums were no longer affordable, and he felt forced to cancel his insurance without receiving any pay-out. He said the bank had misled him by not properly disclosing the long-term cost of the policy.

Our investigation

We reviewed the information the bank had given Frank when he took out the policy. It included a projection of the size of the premiums he would pay over the next 10 years. This projection clearly showed the premiums would increase as time went on, and would increase at an accelerating pace as he grew older. We found the bank had given Frank all the information he needed to make an informed decision about whether the insurance was right for his needs.

Outcome

We did not uphold Frank's complaint.

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