An investigation by the Insurance Ombudsman’s Office has helped resolve a complaint in relation to critical illness insurance.

In 2012 the insured applied for life and critical illness cover.  Four years later she suffered a cardiac arrest and made a claim for a critical illness benefit under the policy.  Initially the insurer declined the claim on the basis that the cardiac arrest did not qualify as a “serious heart attack” but following a review the insurer changed its mind and concluded that it did meet the policy criteria.  However, it then decided to decline the claim for a failure to disclose her full medical history when she took out the policy.  Apparently in 2008 the insured had had dizzy spells and heart palpitations for which she saw a cardiologist.

The Insurance Ombudsman’s Office arranged for three independent underwriters to review what effect that information would have had on their decision to issue a policy to the insured.  Two of the underwriters would have issued a policy on standard terms and the third underwriter would have asked some additional questions.  This meant that the insurer’s decision to refuse cover would not be reasonable, because a prudent insurer would not have refused the cover had the insured disclosed that additional old information.

Following the reports from the three independent underwriters the insurer reconsidered its position and agreed to meet the claim.

Alan Knowsley

Insurance Lawyer