Customer complaints to the Financial Ombudsman Service (FOS) about protection and private medical insurance (PMI) represent a very small portion of its caseload.
But the latest data from the FOS revealed the numbers of complaints had risen across almost all mainstream health and protection insurance products in the first three months of the 2026-27 financial year – continuing a two-year long ongoing trend.
In this initial analysis, Health & Protection reveals the reasons for this increase are myriad.
For some customers, they just don’t understand the product they have purchased, while for others, their grievances relate to how long it takes for their claim to be resolved.
Though there is also evidence linking increasing PMI complaints to private hospitals’ struggle to meet demand for their services in certain parts of the United Kingdom.
And in some instances, customers are being mis-sold or even denied cover.
Complaints on the rise
The latest FOS data showed a rising numbers of complaints across almost all mainstream health and protection insurance products in the first three months of the 2026-27 financial year.
However, upheld rates were generally falling and all except one were below the industry average.
The figures continued an upward trend of complaints, which last year saw almost 5,500 grievances lodged about health and protection products with the FOS, around 2.5% of the overall total.
This has again risen to 2.8% of the 53,553 complaints received by FOS in the first quarter of 2026-27.
IP and PMI keep rising sharply
While the past five years has seen a marked increase in PMI and IP sales, the latest FOS figures will still be unwelcome.
PMI and dental insurance were the largest contributor form the health and protection sector, with 532 complaints from April to June, up by more than 100, or 24%, compared to the first quarter of last year.
One in five (20%) of these complaints decided were upheld, below the 26% financial industry average and down from 25% a year earlier.
IP complaints were up by 65% to 299 from 187 in Q1 2025-26 – the largest rise in numbers and percentage terms in the health and protection market – with only 16% upheld.
Term-life assurance complaints rose by 10% to 218, however it was the only product to see more decisions upheld with 22% in the complainants’ favour.
Critical Illness complaints inched up slightly from 163 to 175 and only 7% of cases were upheld – half the figure a year before.
Non-reviewable whole of life complaints more than doubled to 144 but only 19% were upheld, down from 29%.
The single outlier was reviewable whole of life which was the only product area in this sector to see a decline in complaints as they fell to 84 from 113, but 33% were upheld.
Common complaints
In terms of the common reasons for complaints, Health & Protection understands for health products complaints often can relate to claims declined for misrepresentation under the Consumer Insurance (Disclosures and Representations) Act 2012.
This can be because the treatment which the consumer is seeking to have authorised is considered ‘unproven’ or experimental.
Common triggers for protection complaints, on the other hand, can range from the medical condition in question not meeting the definition of a critical illness set out under the policy, to income protection insurance cases including situations where a claim has been declined because the absence is caused by workplace stress or situational personal stress.
Second most complained about product
The Financial Conduct Authority (FCA) publishes cumulative complaints data from all firms in the industry.
This data has shown complaints about health and protection insurance products and their advice rise over the last few years – with PMI twice being the second most complained about financial product on a per 1,000 policies held basis.
In its latest data, the FCA found PMI complaints had eased somewhat but those about IP had risen sharply.
While Health & Protection understands the FCA does not publish data on the underlying causes of complaints beyond a product-category level, its complaints are recorded under a number of key classifications.
These include advising, selling, arranging and targeted support – with sub-categories including unsuitable advice, unclear guidance or arrangement and information, sums/charges or product performance.
Real people behind every claim
But whether cases are referred to the regulator or the ombudsman, there are real people behind every complaint and digging deeper into the FOS data covering the period April to June 2026 sheds further light on the nature of grievances upheld.
In terms of protection, in the second quarter of the year, in one instance, a complainant was unhappy that a delay arranging their income protection policy had meant they could not successfully claim on that policy.
In another, the ombudsman agreed that a complainant had been mis-sold an income protection policy where the customer had a continuing source of income and could not claim on the policy.
And in another case, a complainant was found to have been mis-sold IP where the benefits payments were less than they had expected.
When it comes to private medical insurance, in one instance, a complaint was upheld where the insurer added an exclusion related to the customer’s muscular skeletal system.
In another case, the complaint related to the way the insurer handled their claim and the service they received when they suffered a knee injury.
In a further case, the complainant was declined cover for treatment for back issues.
Confused about cover
Where complaints are not upheld, confusion about these products is a key issue.
In February, CIExpert’s Critical Thinking 2026 report found seven in ten consumers had not seen or heard anything about income protection (IP) or CI in the last year and their views were often based on false assumptions.
In June, James Daley, managing director of consumer group Fairer Finance, in giving evidence at the House of Lords Financial Services Regulation Committee, suggested some minimum standards and some standardisation of certain concepts were needed so consumers have a better chance of buying products that meet their needs.
That same month, industry research provided further clarity on the extent of confusion about protection cover, with this even extending to customers who have already made a purchase.
A more recent poll from LifeSearch showed many homeowners were confused about the financial support they would receive if they fell ill, suffered an injury or lost their job.
The biggest misunderstanding concerned redundancy, with most homeowners who held an income protection policy (61%) wrongly believing the product would pay out if they were made redundant.
Too often cover is falling short of expectations
LifeSearch chief marketing officer Justin Harper believes too many consumers think they have got a safety net in place, when often they are relying on assumptions that fall short on reality.
This could be IP covering them for redundancy, or overestimating what employer or government support will cover.
“Getting the advice right at the start matters, but making sure it’s understood years later matters just as much,” Harper continues.
“People take out cover at key life moments, often when buying a home.
“Our research showed they then simply don’t revisit it. For many it’s a one and done. Over time, details fade, cover types get blurred – state, employer, personal – and confusion creeps in.
“Income protection is particularly prone to this kind of drift. It has more moving parts, and without regular touchpoints, understanding can naturally deteriorate.”
Similar issues with PMI
But it would be wrong to assume confusion around cover is the sole preserve of protection insurance customers.
John Kerr, director at Incorporate Group, tells Health & Protection grievances around PMI cover tend to relate to a perceived lack of customer service.
“We don’t get a lot of complaints, but generally it’s down to poor service from the insurers,” Kerr continues.
“In terms of the other sorts of complaints we get from people, a lot of them tend to be, if it’s not about poor service and getting a claim authorised on time and all the other stuff, people misunderstand what private medical insurance does.
“They say, I have private medical insurance and I can’t see a dermatologist for six months, but that’s not the private medical insurer’s fault, that’s the hospital networks.
“We are having a terrible time in Northern Ireland at the moment with dermatology and also with neurology.”
Access to treatment
Indeed, issues accessing treatment appear to be a common reason for complaint about PMI.
Brian Walters, managing director of Regency Health, tells Health & Protection: “The increase in PMI complaints is likely explained by the increase in sales over the past few years and the prevalence of ‘guided’ options.
“These are often sold without adequate explanation, such that the cover falls short of consumers’ expectations at the point of claim.”
And some of these issues date right back to the start of the decade and the pandemic, as Brett Hill, head of health and protection at Broadstone, maintains.
“There has been a concern in the market ever since we saw the initial increase in the uptake of policies coming out of Covid,” Hill continues.
“I’ve heard some of those policies were being purchased by people who knew or suspected that they were aware they had medical problems, but were struggling to access treatment on the NHS.
“And they were buying policies in the hope that it would be able to get them the treatment that they need and were finding out on claim that was not the case.
“I’m not entirely surprised that compliant volumes have gone up.”
Adviser service
Kristian Breeze, director at Ascend, a broker that advises on both health and protection insurance, tells Health & Protection that while working at a provider earlier in his career he looked into the issue of complaints and made a significant discovery.
“What I have noticed over the years, you get a lot of people who work in other financial service sectors, not primarily health or protection specialists, and they may have only one or two agencies,” Breeze says.
“We discovered that they may have larger commission share or something to only sell one or two providers.
“And where it is not their speciality, perhaps the advice is not as comprehensive as it needs to be in this sector.
“Perhaps they’re also not receiving an all round cross view of every option that’s available to them.”
Breeze explains that Ascend makes sure that when advising on income protection or health, the broker provides full comparison reports showing every provider in its communications to the client.
“So when we make our recommendation, we share with the client every single quote that came back,” he adds.
“I’ve just found that in recent years that’s not always the case.”
Three factors
Isaac Feiner, managing director at Lifepoint Healthcare, points to three factors at play.
“Cost is the biggest cause,” Feiner tells Health & Protection.
“Renewal increases have become unaffordable for many, and they hit hardest for those who have claimed, which leaves people feeling the insurer is simply recovering the cost of their treatment.
“Second is understanding, as there is a lot in a policy to grasp, and any gap between expectation and cover quickly becomes a complaint.
“Third, and most under-discussed, is friction: it has never been easier to complain, with AI able to draft a polished complaint to the ombudsman in minutes at no cost or effort.
“Tellingly, PMI and dental complaints are up 24% while the uphold rate has fallen to 20%, which suggests many are being lodged simply because it is now so easy to do, not because service has got worse.”
Delays in settlement
Though delays in the settlement of claims are also an issue.
Indeed, FCA Financial Consumer Services panel member Johnny Timpson, in providing evidence to the same Lords inquiry as Daley in July, maintained protection providers should publish the average time taken to pay a claim.
Ultimately, driving down complaints in this area of insurance is so important as this is such an emotive area of financial services.
It can also explain why complaints arise in the first place.
Joanna Streames, owner of Velvet Mortgage and Insure Services, tells Health & Protection: “Claims complaints happen when people are stressed and unwell, so it’s very emotive and the claim experience is very important.
“Now with AI at everyone’s fingertips, it’s so much easier and more accessible for someone to put a detailed complaint together in a fraction of the time than it would have previously taken.
“Generally as a nation, the complaints culture will increase as this is such an emotive area.”
