Covering your back with a new mortgage - critical illness?

dunstonh

I accept that, however that wasn't in the media stories I read/heard.

You surely dont expect the media to give you the full story do you?

Whatever your occupation or skills are you must have seen media articles covering your sphere of knowledge and read with despair at the misinformation or bias they use. Well, if they are doing that in areas you know about then you have to realise that they are doing it in all areas.

droiderm

It's not a perfect analogy, I suspect we aren't going to agree on that. It's extreme if nothing else.
Your some how implying that this guy purposely didn't declare that. You have no way of knowing, but I doubt that very much.
I heard on five live that the law is changing in respect of disclosure, I seem to remember that it was something about the onus being less on the applicant. Surely IF this is the case, then there is an accepted issue with disclosing things in general? If that is the case then your car has safety issues.

I can only assume your not happy with insurance products getting a bad press? Why is that? Is that from a consumer perspective? If it was from a consumer perspective, you would want these policies to be tight in all reasonable circumstances.

JuicyJesus

droiderm wrote: »

Your some how implying that this guy purposely didn't declare that. You have no way of knowing, but I doubt that very much.

I have no way of knowing, no, but from what dunstonh says these were things which were not minor health conditions, but major things which affect someone's likelihood of claiming. If the insurer asked "have you ever been treated for such and such" and the policy holder answered "no" then that is non-disclosure. Whether it's reckless or deliberate isn't known at this time, but I'd imagine deliberate.

I heard on five live that the law is changing in respect of disclosure, I seem to remember that it was something about the onus being less on the applicant. Surely IF this is the case, then there is an accepted issue with disclosing things in general? If that is the case then your car has safety issues.

There's no accepted issue with disclosing things at all. If you're asked a direct question and you give a full and correct answer then you're more or less fine. There have been issues with insurers wording disclosure questions wrongly or interpreting the answers wrongly but these do not apply in this case, nor in most cases.

There is no way that you can somehow contort not fully disclosing health conditions into a fault with the insurer, although it doesn't surprise me that people (not you specifically) will try.

I can only assume your not happy with insurance products getting a bad press? Why is that? Is that from a consumer perspective? If it was from a consumer perspective, you would want these policies to be tight in all reasonable circumstances.

I'm not happy with insurance products getting unfair bad press from uninformed sources which might lead to people leaving themselves underinsured because they believed an outrageously biased scare story. Financial education in this country is outrageously poor and peoples' knowledge of insurance products and what they do is woeful (witness the number of people calling life insurance and CI cover "PPI" on this forum and asking if they can reclaim it as they think it was mis-sold PPI), and scare stories do not help, especially when regurgitated as a "discussion point".

And, again, in the example you've cited, chances are there was nothing wrong with the policy. It was the applicant's failure to correctly disclose his own medical history which was the issue.

EDIT: Googling it, the story is from the Daily Mail. That says it all. Anti-financial services bias from the screamiest rag imaginable with very little regard for the actual truth.

dunstonh

Your some how implying that this guy purposely didn't declare that. You have no way of knowing, but I doubt that very much.

We dont know the mindset of the person. However, there is no indication there were mental health issues. The fact his he failed to disclose some very important points on recent (at time of application) events. We dont know the outcome of the FOS investigation yet. They will have access to information and documentation not currently available in the public domain. So, we have to reserve judgement until then but what is available currently does suggest an intentional non-disclosure (either by deception or misconception).

I recall one insurer labelling one of their products the liar plan as so many applications put in false information or failed to disclose information. This included people with recent heart surgery. There is a public misconception that as long as you dont die or suffer from the illness you have not declared that there will be a payout. That can actually work in some cases but not where the policy would never have been issued in the first place or where it can be shown to be intentional non-disclosure.

This particular case appears to be getting a lot of support from people not knowing about the non-disclosure and who seem to believe it was rejected due to the pins and needles. The media articles certainly help that misconception by twisting Friends Life response to say something different. The Daily Mail article is particularly poor but par for the course with them. It mentions the pins & needles and alcohol reductions but not the tests. Insurers rarely take on people who are undergoing tests until they know the outcome of the tests and the issue regarding the test has been clear for a period (or has no relevance to the cover).

at the time of applying for the life and critical illness policy in 2009 he had been suffering from an inflammatory bowel condition which he had disclosed in the application. He was also asked explicitly whether he had numbness or tingling in his face and limbs and whether he had ever been asked to reduce his alcohol intake for medical reasons. He said no to both of those. The full statement from Friends was: "The recent symptoms of numbness, loss of feeling and tingling sensations recorded in your medical records, together with the abnormal liver function tests you had, could have indicated the onset of a number of serious medical conditions. If they had known about them, our underwriters would not have been able to offer you cover for at least 12 months"

So, you can see we are not talking about some historical issue. We are talking about something that was applicable at the time of application.

DevilsAdvocate1

Surely the OP has not given enough information as to whether a policy like this is relevant. If the OP is young then the likelihood of getting a critical illness is much lower. While some young people do get serious illnesses, it is not as often. And this cover is very expensive.

I have heard of life assurance policies paying out early in the event that someone is ill with a terminal illness. So its not necessarily the case that you have to wait until you die before you can claim.

Personally, I would do some research yourself to try to determine whether is is worth it, especially if you don't have any dependents.

jubilee12

It's getting a bit confusing but I do appreciate that there is no easy answer and you raise valid points.

To put you in the picture - we are, ahem, not young (late 30s-40s), but both in good nick. The other half, just about, keep everything going if something happened to me - but not vice versa, due to wage differences. Piecing together your comments, I think we need to go for life both ways and perhaps consider income protection or critical illness just on the main earner. It's tricky because the cost of the critical is just so high (and I know one could argue, security should be priceless - but in the real world - it's more difficult).

Thanks everyone, anyway.

droiderm

dunstonh wrote: »

We dont know the mindset of the person. However, there is no indication there were mental health issues. The fact his he failed to disclose some very important points on recent (at time of application) events. We dont know the outcome of the FOS investigation yet. They will have access to information and documentation not currently available in the public domain. So, we have to reserve judgement until then but what is available currently does suggest an intentional non-disclosure (either by deception or misconception).

I recall one insurer labelling one of their products the liar plan as so many applications put in false information or failed to disclose information. This included people with recent heart surgery. There is a public misconception that as long as you dont die or suffer from the illness you have not declared that there will be a payout. That can actually work in some cases but not where the policy would never have been issued in the first place or where it can be shown to be intentional non-disclosure.

This particular case appears to be getting a lot of support from people not knowing about the non-disclosure and who seem to believe it was rejected due to the pins and needles. The media articles certainly help that misconception by twisting Friends Life response to say something different. The Daily Mail article is particularly poor but par for the course with them. It mentions the pins & needles and alcohol reductions but not the tests. Insurers rarely take on people who are undergoing tests until they know the outcome of the tests and the issue regarding the test has been clear for a period (or has no relevance to the cover).

at the time of applying for the life and critical illness policy in 2009 he had been suffering from an inflammatory bowel condition which he had disclosed in the application. He was also asked explicitly whether he had numbness or tingling in his face and limbs and whether he had ever been asked to reduce his alcohol intake for medical reasons. He said no to both of those. The full statement from Friends was: "The recent symptoms of numbness, loss of feeling and tingling sensations recorded in your medical records, together with the abnormal liver function tests you had, could have indicated the onset of a number of serious medical conditions. If they had known about them, our underwriters would not have been able to offer you cover for at least 12 months"

So, you can see we are not talking about some historical issue. We are talking about something that was applicable at the time of application.

This particular case seems not so clear now you mention those facts
I am still pretty sure the law is changing in respect to disclosure
I will try and Google it tomorrow. For me that implies these is a perceived issue

Whatever the ins and outs people need to be paid under there circumstances
Whether that's down to better education, more direct questions on application forms or more clear terms and conditions. I am sure everyone would agree it's better for all concerned.

chrisfurbs

He was asked a direct question to which he lied there weren't any caveats as it was straight forward. He lied i don't see how its even up for discussion on such a clear example of non disclosure.

However irrelevant you might find a question if the insurer deems it fitting to ask make sure you answer the question correctly its pretty simple.

droiderm

This is what I think I was referring too.

http://www.moneysavingexpert.com/news/insurance/2011/05/claimants-protected-under-insurance-overhaul

Seems it might not be the case for the discussed example, but surely there is a perceived issue none the less.

dunstonh

droiderm wrote: »

This is what I think I was referring too.

http://www.moneysavingexpert.com/news/insurance/2011/05/claimants-protected-under-insurance-overhaul

Seems it might not be the case for the discussed example, but surely there is a perceived issue none the less.

I'm not convinced there is anything wrong with the current position. There was before the FOS came out with its non-disclosure guide but since that was published, it has made it very clear. Plus, the FOS do look at the questions asked to see if they were suitable and worded correctly for understanding. It seems to be saying that they want the same as the current position.