SERVICE: Life
OUTCOME: Not upheld
Issues: Misselling/ misleading information/ misrepresentation; Scope of cover
Summary: Mr H’s* complaint was not upheld, because the insurer correctly applied the terms and conditions of the policy to the claim, and the policy was not misleading.
Mr H held trauma cover.
Mr H made a claim to the insurer, following a diagnosis of tetraplegia (also referred to as tetraparesis).
The insurer declined the claim and said Mr H did not meet the policy’s criteria for a paralysis claim, because the medical information did not indicate his paralysis was total and permanent and in 2 or more limbs.
Mr H complained that the policy wording was misleading and flawed and the insurer provided misleading answers to his questions.
The case manager’s assessment
The policy required the insurer to pay a benefit if an insured had total and permanent paralysis of 2 or more limbs, which could have included tetraplegia.
Mr H provided a letter from a Rehabilitation Medicine Specialist, which indicated that Mr H had sensory changes, mostly in the legs, which made it difficult for him to walk, particularly in dark environments; he had subtle weakness; he could walk, but slightly unsteadily; and he had nearly normal strength in his lower limbs.
While Mr H did have a diagnosis of tetraplegia, or tetraparesis, his medical records did not show that he had total paralysis of 2 or more limbs. Therefore, the insurer was able to decline the claim.
However, Mr H believed the policy was flawed and misleading. He said that the definition of paralysis generally refers to a loss of power of any degree, from mild weakness to complete loss. He said the policy definition only provided cover for a symptom (paralysis) of the condition rather than for the condition (tetraplegia) itself, which was confusing and misleading.
The case manager did not believe the policy was misleading. Even if the policy definition was inconsistent with other definitions, that did not mean the insurer had to disregard the policy definition and adopt a different definition of paralysis. The policy specifically defined paralysis to mean total paralysis of 2 or more limbs. Tetraplegia would have been covered, if there was total paralysis of 2 or more limbs.
The insurer correctly applied the terms and conditions of the policy to the claim.
*Name has been changed.
Complaint No: 00231601