policy cancelled without 30day warning letter

edgarina

Sorry if this is a bit of a legal questions but this forum seemed well informed.

Parents had a policy with CGU life, now aviva including terminal illness cover. My mother would now meet the criteria for being terminally ill. We believe my father cancelled the direct debit a year ago in error, we are pretty sure at this stage he has early dementia, but too distressed by my mothers illness to see a neurologist at this stage.

My parents recieved no initial letter from Aviva that the direct debit had stopped and then no further letter a month later warning the policy would end if payment wasn't made. We have written confirmation from Aviva that both these letters were sent to the York Head office not my parents address even though they still live at the address the initial policy was sent to when set up. We have a further copy of a letter sent from Aviva to a 'mutual customer' company asking for an address for my parents. I think when CGU ended up as Aviva the adress was lost in 2000 as they set up the policy as the change was happening.

My parents still have a mortgage as my mother (66) was still working and they have no other cover. I was about to write to Aviva esentially saying they are in error and that with missed payments made to them they should re-instate the policy, or more likley after they refuse settle prior to legal letters a decent amount of the policy. My father will struggle if we don't get this money. They were 11 years into a 15 year policy, or 10 when the paymenst stopped in March last year.

I just wanted to check from members here that our case is a strong as we think it is and if anyone had any advise about how to maximise our chances. Is it Law the company send out the letters that never got to my Parents?

Regards to all and thanks in advance.......

ACG

sounds like a bit of a mess.

If your father has dementia, i dont believe he is allowed to start or cancel contracts, unless it hasnt been diagnosed yet. If it has been, then the bank should not have allowed him to cancel the DD.
IF Aviva were to payout on this, presumably it would be for the sum assured minus any DD payments missed. But i think this could be somthing that goes to litigation as your argument is on the basis the letter went to the wrong address. Addresses can be changed to H/Office addresses if for example post has been returned underlivered. Their systems may force them to put in a generic address.

This is one of those disputes where your relying on the fact they didnt send out a letter. Its arguable that if a letter had been sent, your parents would have just binned it anyway (im not saying that would have happened but it is a possibility).

Might be worth speaking with a solicitor, check whether you have legal cover on your home insurance (or if your parents do).

edgarina

Thanks for the reply,

No there is no diagnosis yet but medical family friends have little doubts, and its pretty obvious now he won't cope alone for long, much more obvious now my mother is not there to cover for him.

I agree it will probably get messy and I will probably go Ombudsman prior to legal letters (any reason to avoid ombudsman?). I agree they could argue the letters might still have been ignored but as we can prove they originally had the correct address and then didn't send the letters to it, with these letters being a legal obligation, my parents have irrefutably not had the benefit of the legal safeguard the letters are meant to provide. Had we had the letters plainly we would have no case.

I might hope to settle for an amount relative to how long the policy was valid for 2/3rds of the full amount but opening gambit will be to make all the backpayments to reinstate the policy in full, worth a shot.

dunstonh

I just wanted to check from members here that our case is a strong as we think it is and if anyone had any advise about how to maximise our chances.

The case is messy as there are issues on both sides. I don't think it is a case that anyone can call. They didnt get the address set up at the start but can prove that they attempted to obtain it. However, they didn't cancel the direct debit. The cancellation came 10 years later. Over 10 years, did your parents not query why they never received any mail or policy document? What reason has been given for your father's cancellation of the mandate?

You can bet your life that one thought going through a complaints handlers mind is that the insurance was cancelled as they didnt want it and then when a claimable event has occurred, they are now trying to get a payout. That is not an uncommon attempt by some people who have suffered a claimable event not long after cancelling a policy. So, there needs to be something prepared to counter that.

Is it Law the company send out the letters that never got to my Parents?

The letters were generated but the lack of a correct address prevented them from being received.

I think when CGU ended up as Aviva the adress was lost in 2000 as they set up the policy as the change was happening.

Dont assume anything you cannot prove. It weakens the case if they can show its not that. What change are you referring to? It's more likely some mail was returned and the address deleted. Or it could be that it wasnt entered correctly. Addresses are recorded on the application. So, if the address was removed in error and they wanted to look it up then they would just refer to the application or ask the IFA that set it up. So, I am less confident that it is an error there. Although none of us can tell without knowing the facts.

No there is no diagnosis yet but medical family friends have little doubts

I suspect that is going to be your problem. As far as the law and the doctors are concerned, he is able to make decisions.

I agree it will probably get messy and I will probably go Ombudsman prior to legal letters (any reason to avoid ombudsman?)

You cannot go to the FOS without making a complaint to Aviva first. The FOS are independent and slightly consumer biased compared to the courts as the FOS will expect more of Aviva than the courts would.

with these letters being a legal obligation, my parents have irrefutably not had the benefit of the legal safeguard the letters are meant to provide.

You are relying on something that may not be the case. You certainly wouldnt want to start legal action on that point as its very weak. The complaints process is better.

starrystarry

I hate to be the bearer of bad news but I don't think there is any legal obligation for the insurer to advise your parents about the unpaid premiums. Generally the insurer would write, clearly this is best practice, but I don't believe they have to. It's the policyholder's responsibility to ensure premiums are paid.

I hope I'm wrong, as your family has enough to cope with at the moment, but I fear the worst.

Annisele

I'm afraid I agree with starrystarry; I don't think your case is all that strong.

Fundamentally, it is the policyholder's responsibility to pay the premiums. If the premiums aren't paid, the insurer is entitled to terminate the policy.

I don't think that your father's possible dementia adds anything to your case. He did cancel the direct debit, and (presumably) neither the bank nor Aviva had any reason to suspect that he wasn't competent to do so. So, so far as I can see, the cancellation stands.

I'm reaching somewhat here, but is there any chance your mother would have been able to claim on the policy in March of last year? Did it cover life and terminal illness only, or life and critical illness?

edgarina

Thanks everyone for the comments and realistic expectations. we'll give it a shot and see what happens, right now we have nothing so can't be any worse off.

edgarina

Hi All,

Just thought I would update regarding the issue. Just opened a letter from Aviva saying that as long as we pay all the missed back payments they will re-instate the policy:j

I also just found out that someone, not sure who, but who ever sold the policy to my parents in the first place called my father a couple of days ago having heard there was an issue and said as they felt responsible they would see what they could do. Unsure if this has any baring or, because of my fathers memory issues, what was actually said but as long as they will re-instate as they have said they will then yipee.

I am as paranoid and cynical as they come (should have gone into law or advertising) and can't see anything in the letter that leaves any room for misinterpretation or wiggle room. Looks like it might actually happen.

pvt

Edgarina,

That sounds like good news. But there is one thing that from my experience you should be wary of.

I had a similar situation where a company didn't collect DD on a whole life policy, following change of bank account. And similarly they did agree to reinstate the policy if the missed payments were made, however, they also insisted on a signature to say that the insured (my wife in this instance) was still fit and healthy etc. Although she was, I flatly refused to sign this as a point of principle, and they caved in.

My words of caution would be to make sure that there is no such precondition that Aviva have applied to their re-instating your Mother's policy. If there is then it's worthless. Should this be the case, then you might try my tack of refusing to make any such declaration or to any pre-conditions they apply to the re-instatement on the grounds that they didn't do enough to resolve the stopped DD. In my view, if they believed they had no valid address for your folks, they could have written to them through the bank which they had hitherto been drawing the DD from.

Good luck and hope all goes well.

pvt

kingstreet

The OP doesn't make clear if the possibility of an imminent claim has been notified to Aviva.

If it has, no problem.

However, if it hasn't, paying the back premiums might not be a good idea until Aviva has confirmed it isn't seeking a declaration of continued good health, or completion of a health questionnaire.

Perhaps the OP could clarify?

ACG

I would go with the above. Im quite shocked they have agreed, at least so soon. so i would read everything you sign as i would at the very least have expected you to have to complete a statement of health.

Good news if you dont though