The complaint related to a unit-linked life protector policy with a 33-year term, and the Ombudsman ruled in favour of the complainants.

The consumers stated that following their request to review the policy, the company sales representative advised them to replace the policy with two new policies, a 10-year unit-linked protection policy and an investment plan.

The customers believed that it was unnecessary to cancel the original policy, which they felt could have been amended to meet their new needs. They also found themselves without cover for one month and authorised an independent financial adviser to approach the company on the need for the new policies and the one-month absence of cover.

The company admitted that it was unnecessary to effect the new protection policy and that the original policy could have been altered to meet the consumers' new protection needs.

"But for the fact that the complainants, sensibly, took independent advice on this matter, I am convinced that they would have been seriously disadvantaged by the new arrangements," the Ombudsman said.

She found that the advice of the company sales representative was flawed and that the allegation of churning had substance.

She requested that the company cancel the new protection policy, transfer all premiums to the original policy, amend the original policy to reflect the complainants' current needs, treat the encashment as a partial encashment under the original policy and make a contribution of £500 to the new investment plan.