One in ten critical illness claims, made by those suffering from a serious illness are turned down, according to a report by Money Mail. Their research suggests that the percentage of these claims being rejected by life insurance providers is at it’s highest level since 2007.
Insurers have been thoroughly probed regarding the matter, initially winning the battle against declined critical illness claims. However, the number crept up again to the tune of almost £80 million worth of claims… with many now turning to the Financial Ombudsman Service for help.
One case involves a 43-year-old woman, who was diagnosed with breast cancer; She had been turned down by her insurance provider because of some undisclosed medical condition.
Another case, involves mother of two, Caroline Quirk, who was found to be with cervical cancer who was also dismissed by her insurance provider, Scottish Provident, after not reaching the minimum month of giving up smoking – which is clearly an honest mistake.
Quirk was not reimbursed of the amount owed to her, but was given a meager £3,160 instead. After her claim, Scottish Provident terminated her policy.
The House of Lords is now raising a bill that would require insurance firms to specifically ask about any medical condition that would prevent policy holders from getting hold of their cover. They would also be obliged to pay a share of the claim if the holder made an honest mistake.
Other insurance firms like Royal London, Legal & General, and Aviva had been reported to have raised their dismissed claims, doubling last year’s number.
Meanwhile, the Association of British Insurers (ABI) has started a “non-disclosure” code that guarantees policy holders of the claim when they make an honest mistake.