SERVICE: Life
OUTCOME: Not upheld
Issues: Non-disclosure
In September 2022, Mr S completed an application and applied for life and cancer cover.
In December 2022, Mr S made a claim to the insurer for early payment of the life cover, because he had been diagnosed with terminal cancer. The insurer also considered a claim under the cancer policy.
The insurer said Mr S had breached his duty of disclosure/ made material misstatements when he completed the application. As a result, it avoided the life cover from the beginning. The insurer said, if it had been aware of Mr S’s medical conditions, it would have only offered an accidental death policy. It also declined the cancer claim, because Mr S was diagnosed with cancer in November 2022, which was within 90 days from the start of the cover.
Before Mr S died, he completed the IFSO Scheme complaint form and said he answered the application questions to the best of his ability, with what he knew about his medical history.
The case manager’s assessment
1. The life policy
The insurer relied on sections 4 and 5 of the Insurance Law Reform Act 1977 (the ILRA), which allows an insurer to avoid a policy if there have been statements made which are substantially incorrect and material.
When Mr S arranged the policy, he was asked whether he had ever had diagnoses and/or treatment for heart disorders, abnormal cholesterol or blood pressure, or digestive system or kidney issues. Mr S answered “no” to these questions.
However, these answers were incorrect, because Mr S had been prescribed medication for high cholesterol and reflux, had hernia repair surgery twice and had been diagnosed with mild heart disease.
The case manager was satisfied that Mr S knew he had high cholesterol and reflux, because he was taking medication for these. Further, when he enrolled with a medical centre in 2018, Mr S disclosed he had had 2 hernia surgeries and, in respect of heart disease, his answer was “yes”. In May 2022, 4 months prior to the application, Mr S experienced chest pain and was admitted to hospital, where a coronary angiogram revealed he had mild heart disease and for which he was prescribed aspirin. If Mr S were unsure about whether he had heart disease, he should have disclosed the hospital visit and the insurer would have had the opportunity to find out about that. Mr S’s medical notes recorded that, in November 2022, Mr S told his doctor that he had had a mild heart attack in the past.
Independent underwriters confirmed to the case manager that the information was material information. This meant that the insurer could avoid the life policy and decline to consider the claim.
2. The cancer policy
The cancer policy provided a benefit if the insured was diagnosed with cancer, provided that the signs, symptoms, and diagnosis occurred at least 90 days after the cover started.
Mr S was diagnosed with cancer within 90 days of the cover starting and, as such, the insurer was able to decline the cancer claim.
Complaint No: 00229993