SALLY SORTS IT: Why did HSBC slash my husband’s life insurance payout?

I used to work at HSBC, where I was part of a benefit plan called My Choice. As a result, I took out a £150,000 life insurance policy for my husband.

After a few years I increased this to the maximum level of £250,000. The premium was deducted from my salary until my husband’s premature death in 2021, about 11 months later.

However, when I went to make a claim I was told that I could only increase the level of cover in increments of £25,000 per year and as such I would not be entitled to the amount of cover I paid for.

So I received £175,000 — £150,000 plus an additional year’s raise of £25,000. I hadn’t read the fine print.

My problem is that HSBC did not pick up that I had chosen and paid a higher level of coverage than was allowed.

If I hadn’t claimed, I would have overpaid four years before I was technically entitled to the full amount. I reported this to the bank and they refunded the excess.

However, it refuses to admit that I was misled for 11 months into thinking there was a life insurance policy worth £250,000.

RA, Northern Ireland.

Sally Hamilton replies: When I asked what happened to your husband, you said he had been suffering from terminal lung cancer.

The fact that he was already seriously ill when you raised the level of his life cover might make some readers think.

I admit I was uncomfortable with the first reading, as insurance is usually meant to cover the unexpected, rather than something already known.

If someone in a similar situation were to purchase or renew personal life insurance, they would almost certainly be at risk of being denied benefits if they were later found to have pre-existing health conditions.

However, your deceased spouse was subject to HSBC’s internal regulation, which operates under different rules. Often, these types of schemes do not require members to disclose pre-existing conditions or even complete a health questionnaire.

The risk is spread over a large number of employees of different ages and the insured amount per person is often limited.

In your case, the maximum allowed amount was €250,000. But when you decided to increase coverage to this figure, you missed the fine print explaining the annual increase rule.

However, you thought it was unfair to ignore the extra amount you had paid and were not satisfied with the bank’s refund of the overpaid premiums. You complained but didn’t hear anything for months, so you approached me.

I have asked HSBC for clarification and pointed out to me one of the conditions you had highlighted to me which allows the level of cover to be changed by any amount up to £250,000 at the time an employee undergoes a contract change.

You felt that this condition should apply to you, as you had gone from full-time to part-time when your husband became ill.

HSBC investigated and a few days later told me it would settle the claim in full. Won’t elaborate on why it changed its mind, but a spokesperson said: ‘We are very sorry to hear about the loss of RA and for the time it took to get back in touch.

After a claims assessment, we will make an additional payment of £75,000 plus interest.’

You were relieved and told me that the extra money will make things easier at home.

Locked out of Virgin Money app for eight months

I have not been able to access my Virgin Money app for eight months. I have also not been able to make payments this way.

I’ve called Virgin dozens of times but keep getting thrown off with broken promises. Nobody seems to want to help me.

I urgently needed to go to London for work, but I couldn’t buy a train ticket online, putting my job at risk. To rub salt in the wound, the cost of the ticket skyrocketed as I was on the phone with the bank to sort things out.

RD, Bradford.

Sally Hamilton replies: You sent your email to me after being redirected to the wrong department again – and then it was cut off.

Your anger at this sad customer service was palpable. I’m not sure how you lasted eight months.

I have asked Virgin to resolve the matter within two days. Unfortunately it took a little longer than that. I talked back and forth between you and the bank for a month before it finally got to the root of the problem: The app wasn’t linking to your debit card correctly.

Not sure why this wasn’t discovered sooner, but you’re relieved it’s been resolved.

A spokesperson said: ‘We have sent RD a new debit card that links to its banking app and we have agreed to a goodwill payment.’

You’ve confirmed that Virgin has sent you £100 for the more expensive train ticket, plus £400 for the inconvenience.

• Write to Sally Hamilton at Sally Sorts It, Money Mail, Northcliffe House, 2 Derry Street, London W8 5TT or email sally@dailymail.co.uk — provide phone number, address and a note addressed to the offending organization giving them permission to talk to Sally Hamilton. Please do not send original documents as we cannot take any responsibility for them. The Daily Mail cannot accept any legal responsibility for answers given.