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Back in 2018 we had a life insurance policy that was set up in 2007, we were selling our house and buying another, our broker wanted to make sure we were covered as we were taking on a bigger debt. She advised to keep the old policy because it was excellent and take out what she called a top up policy. We agreed and this is what we thought was set up. 2023 comes along and we are remortgaging - was advised to take another look at our policies. In turn we have discovered she replaced the old policy for the new one and we have been covered for a lot less than we thought for 5 years. We are tying to determine what an acceptable compensation would be!

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We are tying to determine what an acceptable compensation would be

It mostly depends on whether the acts and representations by the broker caused you to pay in excess and/or have made it more expensive for you to restore your previous insurance plan. The gaps in your description prevent us from identifying whether your claim(s) against the broker is (are) meritorious from other standpoints.

The broker's advice to buy additional insurance suggests that since 2018 you must have paid more than you used to. In that case, you would be entitled to recover from the broker the excess over the premium paid for the insurance you actually had after the old policy got replaced. In England the statute of limitations for claims of breach of contract is six years. This implies that delaying legal action for another year will reduce the amount to which you are entitle to recover.

If insurance similar to the old, "excellent" policy now costs you more than it would had the broker never replaced it, you might be entitled to that difference as well. That is because the broker advised you something and she did the opposite, thereby unjustifiably worsening your position.

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If you had died there might be something here, but as long as you were only charged for the lower amount, an appropriate remedy would be back-dating a new larger policy based on your previous age. You haven't been harmed.

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    If they lost a much better price they would have been locked into, and have to pay more to get back the same coverage level now, they may have been harmed.
    – R.. GitHub STOP HELPING ICE
    Commented Mar 15, 2023 at 2:18
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This was your decision

I have no doubt that this was what was discussed and that you believe you told the broker to retain the old policy. However, that’s not what happened and what did happen, happened by your actions - you had to sign the paperwork. Which means, in the eyes of the law, you read and understood everything you signed.

So, from a legal point of view, the broker made the suggestion but you chose not to follow it.

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  • Are you saying it's impossible for a broker to make a mistake?
    – Mark
    Commented Mar 15, 2023 at 2:22
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    @Mark, not at all. However, a clear intention on the part of the principal (by signing the documents) means that the advice has been heard and disregarded.
    – Dale M ♦
    Commented Mar 15, 2023 at 3:00
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    @DaleM: £38 billion of PPI compensation suggests that it's not quite that simple...
    – psmears
    Commented Mar 15, 2023 at 9:53
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    @IñakiViggers it is likely that the broker’s recollection differs from the OPs. And we have documentary evidence of what really happened. If the OP signed without confirming it reflected their current wishes, more fool them.
    – Dale M ♦
    Commented Mar 16, 2023 at 6:40
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    @DaleM: My point is that "signed the paperwork" may not always (in the UK at least) be treated as absolute evidence of having read and fully understood the financial product.
    – psmears
    Commented Mar 16, 2023 at 10:21

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