Life and Critical Illness Insurance Archives - CEL Solicitors

Health Insurance Providers With the Lowest Uphold Rate

danielkeeling — Tue, 12 Dec 2023 09:46:37 +0000

Not only can being diagnosed with a disability, serious illness, or terminal illness come as a huge shock, but it can also have a significant impact on your finances if you are forced to give up work as a result. Life insurance and critical illness cover are often taken out for practical purposes, such as covering a mortgage. However, having this in place can provide valuable financial support and help alleviate some of the stress of the situation.

The Association of British Insurers (ABI) confirmed 53,105 new life insurance claims were paid out in 2022. This is 96.9% of claims made. However, this has reduced from 97% of new claims paid out in 2021 and new claims being declined each year are now valued at an estimated £226 million.

In cases of claims being rejected, consumers are often unaware of the potentially unfair treatment they have received from their insurer and are unaware of how they can challenge this. Of all major insurers, ABI confirmed AIG, Legal and General, and Liverpool Victoria have the lowest uphold rate as shown below.

AIG: 95%
Legal and General: 95%
Liverpool Victoria: 95%

This is compared to the higher uphold rates of their competitors:

Aviva: 99.4%
Royal London: 99.4%
Vitality: 99.8%
Zurich: 98%

In instances of claims being rejected, consumers have the right to challenge the decision and escalate the matter to the Financial Ombudsman Service (FOS) if they remain unhappy with their decision. In this article, we look at examples in which consumers have successfully challenged decisions from insurers with lower uphold rates.

AIG life insurance claim denied

Mrs G took out a decreasing term insurance policy with critical illness cover in October 2013 through an independent financial advisor. The policy provided an initial cover of £33,000 over a term of 11 years. In May 2015, Mrs G was diagnosed with skin cancer and submitted a claim to AIG. However, this was declined on the basis that Mrs G did not disclose her full medical history. They suggest that had they received her full medical history, they would have included an exclusion in her policy. Upon declining this claim, AIG cancelled Mrs G’s policy. Mrs G challenged this, and the matter was escalated to FOS.

The FOS reviewed this claim and concluded it was a case of careless misrepresentation. In instances such as this, the misrepresentation arises from insufficient care. This includes anything from an oversight or an inadvertent mistake. The FOS felt that Mrs G should have answered some application questions differently based on her medical history. However, they also believed it was likely that she misinterpreted the question, resulting in an unintentional misrepresentation.

The complaint was upheld in favour of Mrs G. AIG was instructed to reinstate Mrs G’s policy with the reduced premium and the relevant exclusion. AIG was also instructed to settle the complaint and provide £250 compensation.

Legal and General critical illness claim rejected?

In 2012, Mr A took out two insurance policies through an adviser at a bank. One provided life and critical illness cover and the other just life cover. He fell ill and submitted a critical illness claim to Legal and General. Legal and General investigated the claim and found he hadn’t disclosed he was a smoker when he applied. If he had done so, it said it wouldn’t have offered cover on the same terms.

Mr A challenged this decision. The FOS reviewed the complaint and upheld it in favour of Mr A. They concluded that it was not clear Mr A deliberately or recklessly misled the insurer. They advised that Mr A took the policy out via an advisor, without knowing exactly what question the adviser asked and if his answer was recorded correctly. They therefore felt it was unfair to suggest Mr A deliberately tried to mislead anyone.

FOS instructed Legal and General to restore the position that Mr A would have been in if the right information had been provided. In this case, he would have been offered cover based on smoker rates. This includes a lower amount of cover for the premium he paid. Legal and General were instructed to reinstate this policy and review the claim as if there had been no misrepresentation. Mr A was also awarded £500 compensation.

Liverpool Victoria life and critical illness policy cancelled

Mr and Mrs M applied for a joint life and critical illness policy in July 2013. This was accepted on 11 July 2013 and the policy started on 8^th August 2013. In September 2013, Mr and Mrs M submitted a revised application form. This confirmed Mr M had been signed off work on 8 August 2013 with acid reflux.

Upon submitting this, Liverpool Victoria also discovered that Mr M saw his GP for reflux symptoms and was prescribed medication on 5^th August 2013. It said he should have disclosed this information before the policy started and had it known about this, it would have postponed the policy until Mr M’s health position had been clarified. As such, it cancelled the policy and refunded the premiums paid.

Mr and Mrs M challenged this decision, and the matter was escalated to the FOS. The FOS concluded that there was no evidence for major concern until Mr M’s GP visit on 5^th August 2013. The FOS noted that individuals suffer from indigestion-type symptoms. These will include such things as heartburn and acid reflux. They often resolve quickly and the NHS Choices website states most people with such symptoms will not need to see their doctor and can take action such as changing diet or taking an antacid.

The FOS concluded Mr M had no initial reason to disclose his symptoms to Liverpool Victoria. Based on the facts, FOS advised this was a case of innocent misrepresentation. FOS decided in favour of Mr and Mrs M, instructing Liverpool Victoria to reinstate the policy.

How can CEL Solicitors help if your life or critical illness claim is rejected?

As demonstrated, you can appeal your insurer provider’s decision and escalate the matter to the FOS independently. However, if you are unsure how to do this or find the process difficult, we may be able to act on your behalf.

If you choose CEL Solicitors, we will review the terms and conditions of your insurance policy, your initial application, and your insurer’s decision. If we believe your insurer has acted unfairly, we will build a robust case and communicate with the Financial Ombudsman Service on your behalf. To begin your claim, complete an online form or speak with a member of our team on 0808 273 0900.

Successful Life Insurance Claim Appeals

danielkeeling — Tue, 28 Nov 2023 17:47:23 +0000

As of 2023, life Insurance in the UK is a 65.3-billion-pound market. Life Insurance is often initiated for practical purposes, such as a mortgage. Of the UK population, 35% currently have a life insurance policy and recent studies show all but 3% of those with life insurance have coverage including the likes of, terminal illness, critical illness cover, joint life insurance, and over 50s life insurance.

The vast majority of those with life insurance bought this privately, often under the belief they would never have to make a claim. Those making a claim do so while in an incredibly vulnerable state, and many are served a devastating blow when their insurer refuses to honour their policy.

Sadly, insurance providers refuse to pay out an estimated £226 million each year. These individuals are left feeling hopeless, unaware that they can challenge their insurer when they feel their claim has been unfairly denied. Successful insurance appeals can see the full payout ordered payable to the claimant.

In what circumstances may I have a successful insurance appeal?

Innocent Misrepresentation

According to the Association of British Insurers (ABI) Code of Practice, individuals will have a valid claim where they have acted honestly and reasonably. In these circumstances, a reasonable person would have considered the information, subsequently scrutinised by the insurer, as not being relevant. In cases of innocent misrepresentation, the insurer is instructed to pay the claim in full.

Cases of innocent misrepresentation upheld by the Financial Ombudsman (FOS) can be seen below.

Terminal Illness Insurance Claim

In a recent FOS decision, a complaint had been brought on behalf of the late Mrs H by her husband against Aviva. Aviva declined Mr H’s claim of terminal illness and death under policies held by Mrs H. Aviva claimed their reason for doing so was due to Mrs H not disclosing symptoms she was experiencing at the time of her application.

The FOS reviewed this decision and decided Mr H’s complaint should be upheld against Aviva. FOS advised Mrs H’s symptoms were extremely specific and not relevant to the application questions. As such, Mrs H failed to provide information innocently. Her insurance appeal was successful and Aviva was instructed to pay the claim in full.

Critical Illness Insurance Claim

Mr. G and Miss. B took out a life and critical illness insurance policy with Prudential in 2003. Miss. B was diagnosed with multiple sclerosis in 2015 and claimed on the policy. Prudential denied this claim, advising Miss. B should have included her experience of pins and needles between 2001 – 2022. The insurer claimed had they been aware of this, the policy would have been refused.

The FOS reviewed this complaint and concluded the relevant application questions were not sufficiently clear or that Miss. B should have answered them differently. The FOS instructed Prudential to pay the claim in full, add 8% interest per year from the date it received Miss B’s medical records in 2015 to the date of payment, and provide £750 compensation.

Joint Life Insurance Claim

Mr and Mrs L took out joint life and critical illness insurance with Zurich in 2012. This included cover for total and permanent disability (TPD). Mrs. L’s health deteriorated and she attempted to claim the TPD benefit.

However, Zurich rejected this claim on the basis that information from her medical history had not been disclosed. For example, Mrs L had suffered from depression and anxiety for many years but did not disclose this on her initial application.

The FOS reviewed the complaint and concluded that as Mrs L did not disclose health issues she had experienced for a long time, this would not be classed as innocent misrepresentation. However, as they cannot know what was discussed with the broker or how the application questions were put to the policyholders, they decided it would not be reasonable to classify this as deliberate or reckless. The insurance appeal was successful and upheld, and Zurich was instructed to reinstate the policy.

Careless Misrepresentation

The ABI Code of Conduct advises individuals may also have a valid claim where a misrepresentation arises from insufficient care. This includes anything from an oversight to an inadvertent mistake. In these instances, a proportionate remedy is applied.

Cases of careless misrepresentation upheld by the Financial Ombudsman (FOS) can be seen below.

Terminal Illness Cover

In 2008, Mr H arranged a level-term life insurance policy through his broker. It provided cover of £200,000 for a term of 15 years and included terminal illness benefits. Mr H fell ill and claimed the terminal illness benefit. Legal and General paid a reduced amount, claiming Mr H did not disclose important medical information. This information related to his family history and the causes of his parent’s death.

The FOS reviewed this complaint and concluded it is unlikely that Mr H knew the meaning of complex medical terminology. As such, he would not have known that his father’s cause of death was a type of stroke and would not have provided these details. It was concluded that this was a case of careless misrepresentation. Legal and General were instructed to pay the outstanding amount owed to Mr H.

Critical Illness Cover

Mr A took life and critical illness insurance with Legal and General in 2012. Mr A later became ill and attempted to claim on the policy. Legal and General rejected the claim on the basis Mr A had not disclosed the fact he was a smoker on the initial application. They suggested that had they known about this, the policy application would have been rejected.

The FOS reviewed this complaint and concluded that Mr A’s complaint should be upheld. They did not believe it was clear that Mr A deliberately failed to disclose that he smoked. They also concluded that even if this was disclosed, Legal and General still would have offered insurance. They advised Legal and General should reinstate policy on the smoker’s rates and reassess the claim as if there is no misrepresentation. FOS also instructed Legal and General to provide £500 compensation as a result of the successful insurance appeal.

Joint Life Insurance

Mr C and Ms D took out joint life insurance in 2007 via a Legal and General-appointed representative. Ms D underwent a telephone medical interview, where she disclosed to Legal and General that she had suffered from depression for 11 years. Her health deteriorated and she sadly passed away in late 2010 with her cause of death being suicide. Legal and General rejected Mr C’s claim after finding Ms D had attempted suicide in 1995 and 1998.

Mr C did not agree with this position and escalated the complaint to the FOS. The FOS upheld the complaint, advising Ms D was honest about her depression. However, she did not disclose referrals to a psychiatrist or hospital treatment for mental health issues. This was a case of careless misrepresentation and a proportionate remedy was applied.

Over 50s Insurance

Mr and Mrs T sought cover via a third-party advisor in April 2011 with Legal and General. Mr T was diagnosed with multiple sclerosis (MS) in May 2014. When making a claim, he informed Legal and General he had an episode of numbness in 2008 and subsequently had an MRI. He also advised his mother had been diagnosed with MS at a young age. Legal and General rejected his claim, concluding Mr T failed to disclose important information and cancelled their policy.

The FOS reviewed the complaint and upheld it in favour of Mr T. It concluded that this was a case of careless misrepresentation. They believed that Mr T did not intend to mislead the insurer, as he volunteered this information. As such the insurance appeal was successful and Legal and General were instructed to reinstate the policy.

How can CEL Solicitors help if your life or critical illness claim is rejected?

As demonstrated, if your life or critical illness claim is rejected you can challenge this decision. You can complain directly to your insurer and if they reject your claim, you can escalate the matter to the Financial Ombudsman Service. If you are not sure how best to navigate this, our team is experienced in bringing successful financial complaints of this nature. We will review your claim and if we do not believe that your insurer acted fairly, we will prepare a case demonstrating why we think your insurance claim should be paid in full. To begin your claim, complete an online form or speak with a member of our team on 0808 273 0900.

Top Reasons Life Insurance Claims Are Rejected

danielkeeling — Tue, 14 Nov 2023 15:14:17 +0000

Life insurance is meant to provide financial security and peace of mind for you, and your family, should the worst happen. Unfortunately, not all health insurance claims are paid out in part or in full, which can be incredibly stressful for those facing an uncertain future following the loss of a loved one. Because of this, it is essential to understand the most common reasons life insurance claims are rejected to ensure that you and your loved ones are adequately protected.

Misrepresentation or non-disclosure

When taking out a life insurance policy you are required to disclose your medical history as well as any health and lifestyle habits. If you fail to disclose critical details or provide false information, then it can lead to a future life insurance claim being denied. Even unintentional omissions can cause complications or delays during the claims process so you should always give a thorough account of your health and lifestyle at the time of applying.

Non-payment of insurance premiums

It’s important not to let your policy lapse. If you’ve failed to keep up with your payments, then this can result in a future life insurance claim being rejected. If the insurance premiums aren’t paid within the timeframe specified in the policy, it might become inactive, rendering the policy invalid. So, if you’re experiencing financial difficulties, then check your policy so you know what the grace period is.

Cause of death exclusions

Some policies contain exclusions that invalidate life insurance in certain circumstances. For instance, if you die due to activities excluded in the policy, such as extreme sports, then the insurance claim might be rejected. It’s therefore important that both you and any beneficiaries understand the policy and any exclusions contained within it.

Clause relating to suicide

Most policies have a suicide clause stating that if you take your life within a specific period after the policy was taken out then the claim might be denied. These clauses normally relate to the first one or two years after the policy has commenced.

Death during the contestability period

If you die during the contestability period, usually within the first couple of years of taking out the policy, insurers have the right to investigate and deny claims based on inaccuracies or non-disclosures made during the application process. This period acts as a safeguard for insurance companies to verify the accuracy of the information provided by the policyholder.

Fraud or dishonesty

If there’s evidence of fraud or misrepresentation that could impact the terms of the policy, the insurer can contest the claim or cancel the policy entirely. Any suspicion or evidence of fraudulent activity, such as faking illness or death, as well as tampering with documents, can lead to a claim being rejected.

CEL Solicitors’ top tips to prevent a life insurance claim being rejected:

Honesty is the best policy: always provide accurate and complete information during the life insurance application process to prevent issues later.

Regularly review your policy: and update the insurance company about any changes in your health or lifestyle.

Check your policy terms: Make sure you understand and are aware of any policy inclusions, exclusions, and requirements.

Pay your insurance premiums on time: Ensure you make payments on time to avoid policy lapses.

Find out why your critical illness insurance claim may be rejected.

Appealing a rejected life insurance claim

Insurers don’t always get it right so if your life insurance claim has been rejected then you can appeal this decision. At CEL Solicitors we help people whose insurance claim has been denied by their insurer. We offer free initial advice and work on a no-win, no-fee basis so there is nothing to pay upfront and nothing to lose by speaking to one of our friendly advisors today. Call 0808 273 0900 or complete an online form and a member of our team will be in touch as soon as possible.

Insurance Claim Denied Due to Misrepresentation or Non-disclosure?

danielkeeling — Mon, 06 Nov 2023 13:02:55 +0000

Most people who take out life or critical illness insurance do so for practical reasons, without ever expecting to have to make a claim. At the time of taking out the policy they answer questions in good faith, not imagining they’ll be scrutinised later. When the worst happens, those making a claim, are incredibly vulnerable. They’ve either been given a devastating diagnosis, or experienced the loss of a loved one, and must now consider their financial future. Insurance is meant to act as a safety net so when a claim is denied, due to misrepresentation or non-disclosure, it can be a huge blow.

What is misrepresentation and non-disclosure in life or critical illness insurance claims?

A health insurer might refuse a claim if it believes the policyholder misrepresented their circumstances, such as their current health, medical history, or lifestyle choices, at the time of taking out the policy. They may also reject a claim if they believe the insured person failed to disclose something important that would have impacted their decision to provide cover. In cases, where the person is very unwell, or worse still not able to speak for themselves, this can feel especially cruel, and as though the insurer is trying to get out of paying.

Appealing a life or critical illness insurance claim that was denied for misrepresentation or non-disclosure

If you’ve been told that you or your loved one gave incomplete or misleading information at the time of taking out an insurance policy, then your claim will likely be rejected for misrepresentation or non-disclosure. The insurer may suggest you, or the policyholder, was careless or even worse, deliberately dishonest when answering questions as part of the insurance application process. If you don’t agree with this, and feel your insurer is treating you unfairly, or trying to get out of paying your insurance claim, then you can appeal it.

Different ways an insurer might try to get out of paying a life or critical illness claim

If you’re accused of misrepresentation or non-disclosure the insurer will likely argue that if you, or the policyholder, had given more accurate information, at the time of taking out the policy, they would have acted differently. This will normally result in them trying to do one of four things:

They might try to charge you more money for your health insurance policy on the basis that they would have charged more at the time.
They might apply a restriction to your insurance cover – meaning the ongoing claim, or any future claim, is denied.
They might settle a claim proportionately – paying only part of the claim as opposed to the full amount you were insured for.
They might avoid the policy – treating it as though it never existed and therefore not paying you anything.

Why use CEL Solicitors if your life or critical illness claim is rejected?

If your life or critical illness claim is rejected, you can absolutely complain directly to your insurer. You can also take your case to the Financial Ombudsman if you’re not happy with their response. However, if you’re not sure how best to navigate this area or would prefer someone else to do this for you, then our friendly and professional team are experienced in bringing successful financial complaints.

If we don’t believe your insurer acted fairly, we will prepare a robust case setting out exactly why we think your insurance claim should be paid in full. Your insurer has obligations, under The Consumer Insurance Disclosure and Representations Act 2012 (CIDRE). We will consider:

The questions that you were asked: these should be specific questions that were clear and capable of being understood. This is important because if the questions were unclear, this could have led you to not answer or give an incorrect answer.

The reasonable care you took when applying for insurance: bear in mind, that it’s acceptable not to disclose something that you didn’t know or couldn’t have reasonably known, at the time.

The information you gave, was supposedly incorrect or incomplete. The insurer should provide evidence of this. This could be call recordings or a copy of your original insurance application.

Evidence that the insurer would have done anything differently had it been given the correct or complete information. If the misrepresentation was unlikely to make a difference, and you would have likely still been insured, then your insurance should be paid out.

The insurer has been fair in the way they handled the misrepresentation.

It’s important to note, that you’re only expected to take reasonable care not to make a misrepresentation. It might not be reasonable to expect you to remember every detail of your or a joint policyholder’s medical history. In some cases, it might not be reasonable to expect you to know the answer to a question at all.

Overturning a life or critical illness insurance claim

If we can demonstrate that you haven’t made a misrepresentation, or that the insurer treated you unfairly, we can help you:

Get the terminated insurance policy reinstated

Get any newly added terms removed, reverting to the original policy

Reclaim any increased premiums that were added, plus interest

Settle the claim in full (as opposed to no or a partial payment)

Claim compensation for the distress and inconvenience you’ve suffered

Appealing an insurance claim rejected for misrepresentation or non-disclosure

Insurers sometimes get it wrong so if your life or critical illness insurance claim has been denied then you can appeal this decision. At CEL Solicitors we specialise in insurance claim appeals. We offer free initial, no-obligation advice if you would like a second opinion. We also work on a no-win, no-fee basis so there is nothing to pay upfront and nothing to lose by speaking to one of our friendly advisors today. Call 0808 273 0900 or complete an online form and a member of our team will be in touch.

Common Reasons Critical Illness Insurance Claims Are Denied

danielkeeling — Mon, 30 Oct 2023 16:30:23 +0000

Critical illness insurance promises financial protection during a health crisis. This can help you and your family maintain your lifestyle by giving you a financial safety net as you navigate a serious illness or debilitating medical condition. If a critical illness claim is rejected or only partially paid out it can compound an already distressing and challenging time. It’s therefore important to understand the main reasons critical illness insurance claims are rejected so that this doesn’t happen to you.

Non-Disclosure or misrepresentation

Much like life insurance, you must fully disclose your medical history, any pre-existing conditions, and lifestyle habits when applying for critical illness coverage. If you’re not completely truthful, or you fail to disclose relevant information, this could delay the claims process or result in your critical illness claim being rejected.

Policy exclusions

Critical illness policies will list specific conditions and illnesses that are covered by the policy. If your diagnosis isn’t included in the policy, then a claim might be denied. Common exclusions include pre-existing medical conditions, certain types and stages of cancer, chronic illnesses, age-related conditions, cosmetic procedures, mental health conditions and drug and alcohol related ailments. It’s therefore crucial to understand the policy’s terms regarding covered illnesses.

Waiting periods

Some policies have waiting periods before you are covered. If the critical illness occurs within this period, the claim might be rejected. You must typically wait at least a month before you can make a claim on your health insurance policy. If you become ill soon after taking it out, you should check how long the waiting period is and think about how you will support yourself during this time.

Failure to meet policy definitions

Claims might be denied if the diagnosed illness or medical condition doesn’t meet the specific criteria outlined in the policy. For instance, if the severity of the illness doesn’t match the policy’s definition of that specific condition.

Policy lapses or claims made after the policy has expired

Non-payment of premiums can invalidate the policy and result in a claim being rejected. If the policy isn’t active at the time of diagnosis because it has expired or been cancelled, then the claim will also be denied.

Fraudulent Claims

If fraudulent activity is suspected, such as fabricating medical evidence or misrepresenting the severity of your condition, your claim can be rejected.

CEL Solicitors’ top tips to prevent a critical illness claim being rejected:

Tell the truth: make sure you provide accurate and detailed information about your current health, medical history, and lifestyle choices.

Read and re-read your policy: check the covered illnesses, waiting periods, and policy definitions.

Keep on top of payments: Make sure you pay your insurance premiums on time to keep the policy active.

Appealing a declined critical illness insurance claim

At CEL Solicitors we understand that being told your critical illness claim has been rejected can be a devastating blow. Denials can be overturned so if your insurer has rejected your health insurance claim you can appeal it. CEL Solicitors specialises in appealing unfair decisions by insurers. We offer free initial, no-obligation advice if you would like an expert to review the decision you’ve received from your insurer. We also work on a no-win, no-fee basis if we take on your case. Call 0808 273 0900 or complete an online form and a member of our team will be in touch as soon as possible.