FOS can't help with my critical illness claim. Please help me

karry1964 · 5 December 2012 at 11:14AM

When my husband and I moved to our new house in 2001 we took out a life assurance policy with critical illness cover with L&G through a brooker called Lifesearch. In 2004 we approached Lifesearch to increase the level of cover following an increase inour mortgage. They advised to keep the existing policy and take out an additional policy. We agreed as long as the additional mirrored the existing, i.e. with critical illness cover. In 2008 I was diagnosed with Grade 3 breast cancer. Following a masectomy, chemotheraphy and radiotherapy and no longer able to work I made a claim against the critical illness cover only to be told that the critical illness cover had been removed when the new policy was taken out. Since then the two companies, lifsearch and L&G have just been blaming eachother. I decided to take this to the FOS who have now told me that it is outside their jurisdiction as the policy was taken out in 2004. Had it been 2005 they could have considered the case. Is there anything I can do other than just give in and continue to suffer the financial hardship this has caused?

Please help if you can.

antrobus · 5 December 2012 at 11:40AM

karry1964 wrote: »

.. Is there anything I can do other than just give in and continue to suffer the financial hardship this has caused?

Get a lawyer.

kingstreet · 5 December 2012 at 12:08PM

So, the new policy was taken out to run alongside the existing policy and not to replace it?

It isn't clear what's happened here.

If the original policy was still running it would be unaffected by the new plan and if you meet the cancer definition, you should at least be able to claim on the earlier contract.

Can you tell us how the new plan was bought - was it an advised sale? Did you receive a suitability letter from the broker explaining how the new plan met your needs and how it fitted with the existing policy?

IMHO if a new plan was taken and it replaced the old one, it would be down to the broker to ensure it met your needs and to make sure it didn't replace the old one if the terms were not equal to, or less favourable.

If this was an error and somehow the insurer managed to replace one plan with another without being instructed to do so, the liability should rest with them.

You went through the complaints procedures of broker and insurer receiving final outcome letters from both, then attempted to escalate to FOS who are denying jurisdiction as the latter was pre-15/1/2005?

karry1964 · 5 December 2012 at 12:48PM

The new policy was taken out to run alongside the exisiting policy. This was the instruction given to Lifesearch. This was an advised sale by lifesearch. We were told that it would be better to take out a new policy to cover the increase in our mortgage and leave the existing policy as it was. We did not receive a suitability letter.

What actually happened without our knowledge was that the exisitng plan was replaced with one that no longer included critical illness cover and the second new plan was also provided again not including critical illness cover. Lifesearch have admitted that they have no record of any written instruction from us or a record of any telephone conversation that gave them an instruction to remove the critical illness cover.

We received a final letter from L&G but could not get a final letter from Lifsearch. We informed the FOS of this and were advised by them that this did not preclude us from making a complaint. We therefore made the complaint to the FOS who have now denied jurisdiction as the latter was pre-15/1/2005.

kingstreet · 5 December 2012 at 1:26PM

Have you made a Subject Access Request under S7 of the DPA to them both?

It seems the best way to approach this is to establish what, and obtain copies of, any information both organisations hold on you. This should also enable you to see any communication between the two.

They'll probably charge you £10 for the privilege, but it seems like the logical first step, particularly if you undertook an advised purchase, but received no suitability letter.

This is a copy of a section of a suitability letter I wrote a few years ago where I was replacing an existing policy. This is the kind of thing you should have received;-

During the course of our discussions you have given me information about your circumstances and the insurance cover you require, as follows;-

-life and critical illness cover is required for the amount of your outstanding mortgage, currently £123,000, should anything happen to either of you with the sum assured decreasing as your mortgage is repaid

- unemployment cover is required in the sum of £750 per month to contribute towards your mortgage and some of your other outgoings, following a one month waiting period in the event of Steve losing his job through no fault of his own, with the benefit being paid until he finds another job or the expiry of twelve months from the start of the claim whichever comes sooner

- income replacement cover of £600 per month is required to contribute towards your mortgage and some of your other outgoings in the event of Steve being unable to follow his own occupation due to an accident or illness following a twenty-six week waiting period, until he is fit enough to return to work, or the end of the mortgage term, whichever comes sooner

- income replacement cover of £450 per month is required to contribute towards your mortgage and some of your other outgoings in the event of Kim being unable to follow her own occupation due to an accident or illness following a four week waiting period, until she is fit enough to return to work, or the end of the mortgage term, whichever comes sooner

Waiver of premium and cover increase options were discussed and rejected on grounds of cost. We discussed the unemployment benefits for Kim but you felt you could continue to maintain your living standards on Steve's income alone. I suggest you review this issue regularly.

You will cancel your current YYY Unemployment Cover to replace it with cover from XXX. XXX will not meet a claim under this cover if it takes place within thirty days of the policy inception. You may, as a result, wish to continue your existing cover until that period expires.

You will cancel your existing Norwich Union protection plan following the commencement of your new plan. Following our discussions you feel this plan no longer meets your needs and it cannot be altered to reflect the changes in your circumstances.

In the event of any medical underwriting problems with your new application, I suggest you consider this carefully and take no action to cancel your existing policy until you are completely happy with the terms of the new plan.

It clearly explains the reasons why actions are recommended and how they refer to discussions held.

karry1964 · 5 December 2012 at 1:30PM

Have not made such a request but will do. We did not receive anything resembling the example you have kindly provided. Do you advise contacting a solicitor?

kingstreet · 5 December 2012 at 1:59PM

You need to get all the documentation you can from both companies, so you can see each "end" of the process in full.

Once you have that, you can identify what has happened and this will enable you to identify the guilty party and formulate an approach.

If you go to a solicitor now, you'll simply be asked to get all the documentation together on which you'll base any claim/action. If you get it now, you can use up your free half hour a bit more constructively when you can put physical documents in front of a solicitor for their consideration and comment.

You need to be looking for how/why/when L&G cancelled the existing policy and on whose instructions...

lisyloo · 5 December 2012 at 2:05PM

The new policy was taken out to run alongside the exisiting policy. This was the instruction given to Lifesearch. This was an advised sale by lifesearch. We were told that it would be better to take out a new policy to cover the increase in our mortgage and leave the existing policy as it was.

Do you have any evidence of this at all? or is this just your memory of events from 2004? What paperwork do you actually possess.

Your memory of events from 8 years ago about who said what to whom isn't enough, you need paperwork.

karry1964 · 5 December 2012 at 2:25PM

I have the existing policy and the new policies. I have written records of telephone conversations with Lifesearch and I have a final written communication from L&G.

lisyloo · 5 December 2012 at 3:02PM

If you exhaust the complaint procedure then it sounds like it's up to you to take civil action. Do you have any free legal cover on your household insurance? Would it cover you?
It would seem to be in your best interest to exhaust the free complaints procedures first before considering legal action.

weighty1_2 · 5 December 2012 at 3:07PM

Very few companies allow brokers to cancel a clients policy. It generally has to be done by the policyholder themselves to try and avoid situations like this. The new L&G system does allow existing plans to be replaced by new plans where the broker has the existing policy numbers, however, I cannot recall that this use to be the case.

From what you are saying the error appears to be leaning towards that of L&G. As you say, the LifeSearch broker recommended keeping the existing plan and just taking a top-up - generally good advice in many situations but somehow that plan was replaced by a life only plan. I cannot see how this has happened without the original plan either being cancelled by you, or an error by L&G?

Hope it gets resolved though.

FOS can't help with my critical illness claim. Please help me

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