MORTGAGE TAYLORS LIMITED · DRN-6190562

The complaint Mrs D and Mr D complain about the sale of life assurance policies by MORTGAGE TAYLORS LIMITED (MTL). Mrs D and Mr D say the assurance policies should have provided life cover for both of them and MTL didn’t inform them that only Mrs D was covered by the policies. What happened In May 2021 Mrs D and Mr D applied for a new mortgage. During that application process MTL provided them with a quotation for a joint decreasing term assurance policy to match the level and term of the mortgage. It also recommended a level term assurance policy for family protection. Mrs D and Mr D accepted the recommendation, and the underwriting process began which included both of them answering questions about their health and any medical conditions. The provider of the assurance policy then contacted MTL to indicate that it was unable to offer cover to Mr D because of a medical condition. MTL contacted Mrs D by telephone shortly after and there was a conversation about the cover. At the same time the provider sent Mrs D and Mr D welcome letters which set out the cover, with both of them listed as policyholders but only Mrs D named as the sole life assured. Mrs D and Mr D paid regular premiums for the cover. In May 2025 Mrs D and Mr D complained to MTL. They said at the time of the mortgage application, they had been advised that a joint life insurance policy had been set up for both Mrs D and Mr D and documents had been sent to them confirming this. Mrs D and Mr D said based on that representation, they had made regular premium payments as they believed they were both fully insured under the policy. Mrs D and Mr D said they had recently discovered that Mr D had been declined cover by the provider and that this information had been sent to MTL and new terms had been agreed. They said MTL had failed to inform them, had failed to take steps to rectify the situation and hadn’t properly informed them of the implications. Mrs D and Mr D complained that they had been paying for a policy that only covered one individual and they had been unaware of the risk and lack of coverage for Mr D during a period of ill health. Mrs D and Mr D said MTL’s failure to communicate information and ensure they understood what they were paying for amounted to mis-selling and negligence. They said if they had

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been informed, they would have taken immediate steps to arrange suitable alternative cover. MTL didn’t uphold their complaint. It said their mortgage application had started in May 2021 and the underwriting for their insurances had started shortly after with Mrs D and Mr D completing medical questions as part of the application process. It said the Insurer would then conduct further investigations before it came to a decision. MTL said its team were trained to inform clients if the terms offered by the insurer were different to the initial quotation. So, its representative had contacted Mrs D on 16 August 2021 to explain the insurer was unable to offer cover to Mr D due to ongoing medical investigations, and his terms were therefore postponed. MTL said he could reapply once the medical investigation had been completed and it said this was standard industry practice with insurers. MTL said the welcome letters issued by the provider on 16 August 2021 had clearly stated Mrs D was the sole life assured. It also noted the letters referred them to the insurance provider’s portal where they could review their policy documents. MTL said the suitability letter it sent to Mrs D and Mr D made it clear that their application was subject to medical underwriting and as it had contacted them in August 2021 to inform them of the cover being offered and the provider had issued letters showing Mrs D as the sole life assured, it had informed them that the policy would only cover Mrs D. Mrs D and Mr D disagreed with MTL and referred their complaint to our service. Our investigator considered the complaint but didn’t think it should be upheld. The investigator said MTL recommended Mrs D and Mr D a joint decreasing term assurance policy with a term of 33 years to coincide with their mortgage term. MTL also recommended taking out a joint level term assurance to protect their dependants until the reached the age of 21. She said the statement explained the policies were joint so both lives would be cover but any payment would be made on the first life assured to pass away. MTL also explained the policies were subject to underwriting. The investigator noted that the provider of the assurance indicated that it was unable to offer Mr D cover and in August 2021 it offered revised terms with only Mrs D being offered cover. The investigator noted that shortly after MTL contacted Mrs D. It said it had discussed the revised terms and explained that because of Mr D’s ongoing medical condition, only Mrs D was offered cover, but that Mr D could reapply when he knew the outcome of his medical investigations. The investigator considered it was more likely than not, that Mrs D was made aware that Mr D wouldn’t be covered by the policy during the call on 16 August 2021 as the call notes indicated this was discussed. The investigator also noted that the demands and needs statements made them aware that the policy was subject to underwriting which meant there was a possibility that they might not be accepted by the insurer, or the price of the policy could change. The investigator also noted that the welcome letters sent by the provided in August 2021 showed both Mrs D and Mr D as the policyholders but only Mrs D as the life assured. Overall, the investigator didn’t think MTL had acted incorrectly.

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The investigator also noted Mrs D and Mr D’s complaint MTL had taken more than eight weeks to respond to their complaint which was outside of the time limits set by the FCA. However, she concluded that it missed the deadline by a significant amount, and she didn’t think it had impacted Mrs D and Mr D bringing their complaint to our service. Mrs D and Mr D disagreed and in summary said: The investigator’s conclusion relied heavily on MTL’s internal contact notes. They didn’t dispute that the call had taken place but didn’t agree that they had been clearly informed during that call that Mr D had been declined cover due to medical reasons. They said there was no independent or contemporaneous evidence to demonstrate that critical information had been given to Mrs D in that phone call. There wasn’t a call recording, follow up email or written conformation explaining that only one life would be covered. They said given the significance of that information; there should have been written confirmation. Mrs D and Mr D said, if they had been informed that one of them wouldn’t be insured, they wouldn’t have proceeded with the policy at that time. They said the written documentation sent to them was misleading as it named them both as policyholders but didn’t clearly say that Mr D wasn’t covered. They interpreted that to mean that they were both covered. Mrs D and Mr D said being informed a policy is “subject to underwriting” did not equate to being clearly informed that underwriting had concluded that one applicant had been declined outright, and that the policy would proceed on a single-life basis only. As no agreement could be reached, their complaint was referred to me for review. 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. To recap, Mrs D and Mr D were looking to take out a Decreasing Term Assurance policy to cover their mortgage. Mrs D and Mr D were taking out a new mortgage, and they didn’t have existing cover. The way this type of policy works is that the cover decreases over the term of the mortgage as the outstanding amount decreases and so it is designed to be a more cost- effective way of providing cover to protect a mortgage. As the investigator has explained, in a joint policy where both life assureds are covered, if either of them dies during the term of that policy, the policy would pay out a lump sum (the sum assured). There then wouldn’t be any further payment. Mrs D and Mr D were also advised by MTL to take out a joint level term assurance policy for general protection as they had two children. Mrs D and Mr D aren’t complaining about MTL’s recommendation to take out life insurance, their complaint is that they weren’t properly informed by MTL that the life insurance would only cover one of them – Mrs D. They also say because they were both named as policyholders that led them to believe they were both covered.

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While MTL provided Mrs D and Mr D with an initial quote for life insurance, that quote wasn’t guaranteed. These types of policy go through underwriting. The provider of the policy asks for more information from the proposed life assureds about their health and medical conditions so it can assess the risk of insuring them. That information once analysed can change the price of the policy or it can even, as happened here, result in that provider deciding it is unable to insure an individual. That isn’t something that is within the control of MTL and I think it was explained in its demands and needs statement that there was a process whereby their proposal would be considered. It said: “This policy is with XXXX (redacted) at a cost of £27.49 per month and is subject to underwriting. Once your proposal has been accepted, the premiums will be guaranteed to remain the same for the term of the policy.” And “Access to Medical Reports Act 1988 You have given authority for the insurers to contact any doctor who has attended you to obtain medical information to assist them in underwriting your applications, under the Access to Medical Reports Act 1988. This means that the insurers may contact your own GP and may ask you to attend for a medical examination, if they require more in-depth information. When the insurers have considered all of the information both from your answers on the application form and from other sources, they will either confirm cover and issue terms or reject the cover and give their reasons.” So, I think MTL raised this with Mrs D and Mr D in advance as a potential issue. MTL has said it contacted Mrs D to inform her that the provider was unable to cover Mr D, and the policy would therefore only cover her life. Mrs D and Mr D don’t dispute that there was a telephone call but say they weren’t clearly informed of the change to the terms offered. I have carefully considered the call notes provided by MTL which are dated and include the time of call and the name of the representative who called. The notes say: “Discussed terms with Mrs, only Mrs accepted and rated and Mr unable to have terms due to ongoing medical condition. Advised Mrs, Mr can reapply when he knows outcome from investigations.” I think it is clear from that note that MTL informed Mrs D that the provider hadn’t offered Mr D cover and the reason behind that. Mrs D and Mr D say I shouldn’t rely on this note because it is an internal record, and not contemporaneous like a call recording. I agree that a call recording would have given a fuller picture of what was discussed than a summary note, but I don’t think that means it has no evidential value. Businesses do keep internal records of contact with consumers to record what has happened and here I consider that record is relevant to the complaint. I consider it is credible that having received that information from the provider, MTL called Mrs D in order to update her and Mr D, as to what

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was being offered, and I consider the note supports this. I also think the inclusion of the time, date and identity of the representative indicates it was sufficiently contemporaneous to be relied upon. So I think it is more likely than not, that MTL informed Mrs D that the policy wouldn’t provide cover for Mr D. I note that Mrs D and Mr D have said they wouldn’t have proceeded with the policy if they were aware only one life was covered, but I think that assertion is made with the benefit of hindsight. By proceeding with the offer, Mrs D and Mr D at least managed to achieve one of their objectives which was to secure protection for the life of Mrs D. And they had the option to secure cover for Mr D at a later date, when the results of his medical investigations were available. I appreciate the point made by Mrs D and Mr D that when they received the policy they were both named as policyholders, so that was why they thought they were both covered. However, I think it was clear from that documentation that there was only one life assured – Mrs D. I consider there is a distinction between being the policyholder and the life assured and I don’t think being a policyholder automatically means you are a life assured. I also note that documentation wasn’t issued by MTL, so it isn’t responsible for whether the contents were clear, fair and not misleading. But I consider the documentation, sent by the provider, made it clear there was only one life assured and therefore confirmed what MTL had already told Mrs D. I also note the letter signposted Mrs D and Mr D to further information available on the customer portal. It said: “Your Policy Schedule, Terms and Conditions and Key Features Document These documents explain what is and isn’t covered by your policy, what you can expect from us and your policy.” So, I consider there were further opportunities for them to check the position with regards to their cover and either cancel the policy if they were unhappy with single cover or keep the policy and seek cover for Mr D when his medical situation became clearer. I note they were able to cancel within 30 days of receiving the letters and receive a refund of any premiums paid. In any event, I don’t consider MTL acted incorrectly as it applied for the life insurance on the basis agreed with Mrs D and Mr D, then having been informed that the provider couldn’t offer cover to Mr D, it updated them and offered a suggestion as to how they might be able to move forward in the future with Mr D’s cover. I don’t think the information provided by MTL was unclear, unfair or misleading. Overall, I don’t think MTL has acted incorrectly or treated Mrs D and Mr D unfairly. Complaint handling Mrs D and Mr D have complained about the time it took MTL to respond to their complaint and pointed out it was outside the eight weeks prescribed by the rules.

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I note, as the investigator has outlined, that the time taken for issuing a response didn’t fall far outside the eight weeks although I appreciate that it would have been frustrating for Mrs D and Mr D to wait longer for a response. However, I consider the point raised by Mrs D and Mr D about the time it took MTL to respond is a complaint about complaint handling. Complaint handling, of itself, is not a regulated activity so it doesn’t fall within my remit. I am unable therefore to consider that matter. My final decision My final decision is that I don’t uphold Mrs D and Mr D’s complaint against MORTGAGE TAYLORS LIMITED. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs D and Mr D to accept or reject my decision before 27 April 2026. Julia Chittenden Ombudsman

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