Lifesearch Partners Limited · DRN-6206076

The complaint The estate of Mr C complain that Lifesearch Partners Limited (‘Lifesearch’) made an error when selling a life insurance policy, resulting in a shortfall in a subsequent claim settlement. What happened Mr C bought a life insurance policy from Lifesearch in January 2019. The policy provided cover for a total claim payment of £245,000, with a monthly premium of £18.78. When Mr C very sadly passed away, his estate made a claim under the policy. The insurer only paid a percentage of the claim. It said it wouldn’t pay the full £245,000 because Mr C hadn’t told it about raised blood sugar and a condition called Barrett’s oesophagus when he bought the policy. The estate of Mr C complained to Lifesearch, saying Mr C told it about raised blood sugar in a telephone call when the policy was sold. Lifesearch acknowledged it had made an error by failing to pass this on and sought information from the insurer about how much the claim settlement would have been if the insurer had known about raised blood sugar. Lifesearch subsequently offered to pay the estate of Mr C a total of £17,870.50 (which included compensation of £500 for distress and inconvenience). Lifesearch later increased this offer to £18,370.50 (which included compensation of £1,000 for distress and inconvenience). The estate of Mr C didn’t accept Lifesearch’s offers and brought a complaint to the attention of our Service. One of our Investigators looked into what had happened and said she didn’t think Lifesearch had correctly calculated the shortfall in the claim settlement which arose as a result of its error. She recommended that Lifesearch should instead pay the estate of Mr C a total of £70,952 together with interest. The estate of Mr C accepted our Investigator’s opinion. Lifesearch didn’t but increased its offer to a total of £35,976 (including £500 compensation for distress and inconvenience). As no resolution was reached, the complaint was referred to me. I made my provisional decision about the complaint in February 2026. In it, I said: ‘I’m very sorry to hear about the sad circumstances which led to this complaint, and I’d like to offer Mr C’s family my sincere condolences for their loss. I don’t intend any discourtesy to Mr C or his family by referring to his ‘estate’ throughout this provisional decision. It is Mr C’s estate who is eligible to bring this complaint to our Service under the rules that govern us, and any redress for financial loss is payable to the estate, which is why I have referred to Mr C’s family in this way. When making this provisional decision, I can only consider the regulated activities which Lifesearch is responsible for as seller of this policy. Lifesearch was responsible for arranging Mr C’s insurance policy based on the information he gave to it. The insurer, not Lifesearch, was responsible for the clarity of the questions Mr C was asked about his health when the

-- 1 of 5 --

policy was sold. The insurer is also the business responsible for the decision to reduce the claim settlement paid to Mr C’s estate because it wasn’t told about Barrett’s oesophagus. If the estate of Mr C are unhappy with either of these issues then they would need to complain to the insurer directly in the first instance, before bringing a separate complaint to our Service about the insurer. Lifesearch has acknowledged it made an error when this policy was sold by failing to pass on the details of Mr C’s raised blood sugar to the insurer. So, in order to put Mr C’s estate back into the financial position they would have been in if this error hadn’t been made, I need to think about what would have happened if Lifesearch had told the insurer about Mr C’s raised blood sugar. For the avoidance of doubt, I don’t think what would have happened if the insurer had known about Mr C’s Barrett’s oesophagus is relevant to the calculation of the loss flowing from Lifesearch’s error. The insurer would never have known about Mr C’s Barrett’s oesophagus, regardless of Lifesearch’s actions. The Consumer Insurance (Disclosure and Representations) Act 2012 (‘CIDRA’) sets out an insurer’s remedies if a policyholder (or an agent acting on the policyholder’s behalf as Lifesearch was here) fails to take reasonable care not to make a misrepresentation when answering questions about their health. The applicable remedy in a situation such as this is for the insurer to proportionately reduce the amount of the claim settlement, calculated with reference to the higher premium the insurer would otherwise have charged. While I’ve carefully thought about the calculations I’ve been provided with and have aimed to check their accuracy, our Service is an informal alternative to the civil courts. I’ve based my provisional decision on what I think is fair and reasonable to both parties based on the overall circumstances of the complaint as a whole, taking into account the information which has been provided to me. I don’t think Lifesearch accurately interpreted the information given to it by the insurer, and I also don’t think Lifesearch fully explored or sought to understand the true extent of the financial impact its mistake had on Mr C’s estate. The insurer has confirmed to both Lifesearch and our Service that if it had known about Mr C’s raised blood sugar (but not his Barrett’s oesophagus), it would have paid a total claim settlement of £200,312 instead of the claim settlement of £129,360 which it did pay. This is a shortfall of £70,952. I’m satisfied this represents the potential financial loss to Mr C’s estate. I’ve attached a copy of the insurer’s email to our Service about this for Lifesearch to see. Lifesearch’s file shows the insurer also confirmed this figure to it in an email of 3 January 2025. Lifesearch, when considering redress, instead based its calculations on a lower total claim settlement figure of £146,730.50. Lifesearch thinks this figure reflects disclosure of raised blood sugar, but I’m satisfied this figure instead reflects the omission of raised blood sugar. I don’t think it’s accurate or reasonable to base the calculation of Mr C’s estate’s financial loss resulting from Lifesearch’s error on this amount. If Lifesearch had told the insurer about Mr C’s raised blood sugar as it ought to have, Mr C would have paid a higher premium for the policy. In order for me to consider it fair and reasonable in the circumstances to direct Lifesearch to pay the shortfall in the claim settlement, I need to be satisfied it’s likely Mr C would have gone ahead and bought the policy anyway at a higher price. The insurer has provided information to our Service which I’m satisfied demonstrates Mr C

-- 2 of 5 --

would have paid an additional monthly premium of £12.58 to cover raised blood sugar. So, this means Mr C would have paid a total monthly premium of £31.36 instead of the monthly sum of £18.78 which he did pay1. The evidence which the insurer has provided in this regard is commercially sensitive, so I can’t share it with the parties, but I want to assure them I’ve carefully considered it and I’m satisfied it’s fair and reasonable to consider the figure of £12.58 as the relevant additional monthly premium when thinking about redress in this case. Our Investigator incorrectly referred to Mr C as having to pay a smaller additional monthly premium to cover raised blood sugar. Based on the evidence I’ve seen, I’m satisfied Mr C would have paid a smaller additional monthly premium of £4.19 to cover Barrett’s oesophagus. But, as I’ve already explained, I don’t think what would have happened if the insurer had known about Barrett’s oesophagus is relevant to the calculation of the loss flowing from Lifesearch’s error in this case. The fact the insurer didn’t know about Barrett’s oesophagus is reflected in a separate proportionate reduction in the claim settlement. I have no way of knowing for certain whether Mr C would definitely have gone ahead and paid an additional monthly premium of £12.58 to cover raised blood sugar. So, in line with my remit, I’ve based my provisional decision on the balance of probabilities (i.e. what I think is more likely than not to have happened in the circumstances). I’ve listened to the sales calls between Mr C and Lifesearch. I don’t think Mr C expressed any concerns about the cost of the policy. Mr C mentioned the potential sale of a property, but I think this was in the context of his personal circumstances rather than any financial considerations. I don’t agree with Lifesearch’s submissions that Mr C’s comments about the new policy costing £6-£7 more per month than his existing policy meant Mr C’s primary concern was cost. Having considered the context in which these comments were made, I think this was merely an observation on Mr C’s part rather than a concern. Mr C’s clearly stated priority during the calls was to protect the mortgage on a property for a set term. When Mr C was asked about his need for other insurance to protect his income, he said he could afford to continue paying himself monthly if he was unable to work. And, Mr C said he wasn’t concerned about the cost of the new policy temporarily overlapping with his previous policy. No issues relating to cost or affordability are mentioned on the ‘Statement of Demands and Needs’ which Lifesearch sent to Mr C. Based on the information provided to Lifesearch by Mr C about his occupation and income during the calls, as well as what his estate has told us about his circumstances at the time, I don’t think a policy costing a total of £31.36 per month would have been unsuitable or unaffordable for him. So, overall, I’m satisfied it’s likely on the balance of probabilities that Mr C would have gone ahead and purchased a policy covering raised blood sugar were it not for Lifesearch’s error. Lifesearch says it shouldn’t be responsible for the full amount of the estate’s financial loss because Mr C failed to mitigate the situation by not correcting information set out in documentation subsequently sent to him about the policy. I don’t think this is a reasonable position for Lifesearch to take. 1 By way of further explanation, the insurer told Lifesearch a ‘75% loading’ would apply for raised blood sugar. An additional premium of £12.58 to cover raised blood sugar seems to equate to 75% of the original additional premium of £16.78 which the insurer initially said would have been charged to cover both raised blood sugar and Barrett’s oesophagus.

-- 3 of 5 --

This was an advised sale by Lifesearch, and it needed to comply with rules and guidance set out by the industry regulator about such sales. The error here was made by Lifesearch, not by Mr C. The fact the insurer may have sent information to Mr C about the policy after the sale had already concluded doesn’t mean it would be fair or reasonable to consider Mr C as being responsible for part of his estate’s subsequent loss. I’m satisfied, based on the individual circumstances of this case, that the fair and reasonable outcome to this complaint is for Lifesearch to compensate the estate of Mr C for the full extent of the financial loss which I think flows from its error. This means Lifesearch should pay the estate compensation of £70,952 for the financial loss it incurred. However, to accurately reflect what would otherwise have happened, I think it would be fair and reasonable to allow Lifesearch to deduct the additional monthly premiums of £12.58 which Mr C would need to have paid to cover raised blood sugar. I have no doubt this situation has caused significant upset, distress and inconvenience to Mr C’s estate at what must have already been a very difficult time. However, I have no power to award compensation for distress and inconvenience experienced by an estate. Lifesearch previously offered £500 compensation for distress and inconvenience, which it later appears to have increased to £1,000. I’m unable to provide any further comment on this other than to say Mr C’s estate would need to contact Lifesearch directly to see if the offer to pay compensation for distress and inconvenience is still open to be accepted.’ Mr C’s estate accepted my provisional decision. Lifesearch didn’t respond, despite being reminded about the deadline. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. As neither party has provided any further submissions, I see no reason to change my provisional findings. Putting things right Lifesearch Partners Limited needs to put things right and do the following: • pay the estate of Mr C compensation for financial loss of £70,952 (being the shortfall in the amount of the claim settlement as a result of Lifesearch Partners Limited’s failure to pass on information about Mr C’s raised blood sugar to the insurer) less the total additional premiums of £12.58 per month which Mr C would have paid to cover raised blood sugar over the lifetime of the policy: • pay interest on this compensation for financial loss, calculated at 8% simple per annum from the date the insurer paid the partial claim settlement until the date the compensation for financial loss is paid by Lifesearch Partners Limited2. My final decision I’m upholding this complaint and I direct Lifesearch Partners Limited to put things right in the 2 If Lifesearch Partners Limited considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell the estate of Mr C how much it has taken off. It should also give the estate of Mr C a tax deduction certificate if they ask for one, so they can reclaim the tax from HM Revenue & Customs if appropriate.

-- 4 of 5 --

way I’ve outlined above. Under the rules of the Financial Ombudsman Service, I’m required to ask the estate of Mr C to accept or reject my decision before 6 April 2026. Leah Nagle Ombudsman

-- 5 of 5 --