Lloyds Bank Hospital Plan cancelled - Cigna

DaveJarvis

This has been posted to the insurance thread but I wanted to get maximum coverage as it has a sort of PPI compensation feel to it, if enough people are involved.
I have had a Lloyds Bank Hospital Cash Plan for over 30 years. The benefits build as you pay the yearly premiums and I was relying on this to pay some cash back if ever I had to go into hospital. The policy was bought (transferred) to First Assist from Lloyds and then when First Assist and Cigna merged was transferred to Cigna. They have just written to me to say they are unilaterally cancelling the plan and that I should approach another provider. I will never get the cover this offers for anything like this premium because I have aged 30 years! Anyone else in the same predicament and if so can we do anything about it in terms of compensation for a plan which we have diligently built up over the years?

dunstonh

It isnt PPI.

However, like anything, you can complain about it if you feel you have reasons for doing so. Although you would not expect success in this case.

if so can we do anything about it in terms of compensation for a plan which we have diligently built up over the years?

It is important to realise that this type of plan is not guaranteed and is allowed to be cancelled by the provider and would not be a regulatory breach by doing so.

And you have not built anything up. It is effectively pay as you go.

DaveJarvis

Thanks for your reply.

In effect I have built the policy up, the benefits on this policy go up by 5% every year provided you continue to pay the policy fee. The start off amount I got when the plan started was £40 per day, after 30 years the amount is near to £180 per day, however the amount I am paying has not increased proportionately so it was a good value plan. They are to stop the policy in August, I'd better spend some time in hospital before this...…...

[Deleted User]

DaveJarvis wrote: »

In effect I have built the policy up

You really haven't.
The policy is pay-as-you-go.

Regardless, it will go come August

Wiseview

I am in the same boat. I received my letter a few days ago, have been in the plan for 20 years, never claimed, but expected to in my later years and felt secure knowing that I was covered in the event of ill health. What would be a suitable policy to replace this one? Can this be cancelled? Shouldn't they let those with a policy, carry on with it. Any advice would be appreciated.

dunstonh

Shouldn't they let those with a policy, carry on with it

It is their choice. It is not a protected insurance that the insurer cannot cancel.

Any advice would be appreciated.

These plans are largely cash cows to the insurer and not worth having. However, if you feel you still want a similar plan then go get one.

DAVIDC

I received a letter from Cigna closing my Natwest Hospital Plan which I joined in the 1980s.
It may not be a protected insurance, however at the foot of the letter they state " Authorised and regulated by the Financial Conduct Authority" (FCA)This conduct by Cigna should be investigated by the FCA. Like many people in the 1980s, when financial support for people who became ill, was less beneficial than today, and were worried about the effects of losing income, I joined this Hospital Plan.
If I were a cynic, I would suggest that Cigna are closing this part of their business because many of the people who joined in the 1980s are now in their 70s and 80s and need hospital care, and Cigna will now have to pay out a considerable proportion of the money these people have contributed, They should be considered parasites for their actions.However, I am not a cynic, and would not say it.

[Deleted User]

DAVIDC wrote: »

I would suggest that Cigna are closing this part of their business because many of the people who joined in the 1980s are now in their 70s and 80s and need hospital care, and Cigna will now have to pay out a considerable proportion of the money these people have contributed, They should be considered parasites for their actions.

Have you looked at the "benefits" these policies actually offered? As Dunston said months ago, they were largely simply revenue generators for the insurer and so not worth having..

DAVIDC

I am afraid your missing the point. The question is not whether or not these schemes are worth having, the question is what protection do people have if the provider simply decides to cancel the policy when the policy holder has complied with his/her obligations.It is like saying that people who deposit their money with a bank which charges them for having the account and pays no interest can have their account closed without getting their money back. That is why the Financial Services Compensation Scheme was introduced, to protect the public. This is no different. The public should be protected from these arbitrary business decisions.This decision to cancel these policies is suit Cigna and their shareholders.

Nasqueron

DAVIDC wrote: »

I am afraid your missing the point. The question is not whether or not these schemes are worth having, the question is what protection do people have if the provider simply decides to cancel the policy when the policy holder has complied with his/her obligations.It is like saying that people who deposit their money with a bank which charges them for having the account and pays no interest can have their account closed without getting their money back. That is why the Financial Services Compensation Scheme was introduced, to protect the public. This is no different. The public should be protected from these arbitrary business decisions.This decision to cancel these policies is suit Cigna and their shareholders.

I'm afraid it's you who is missing the point.

You have already been told that yes, the firm is allowed to stop providing the policy. It is nothing like a bank keeping your deposited cash. They provide a scheme where you could have made a claim on it as long as it was running. There was no build up of costs, you paid an annual premium, at the end of the year if you did not need to claim, the money is gone, same as car insurance. Not needing to claim is a good thing, it means you are not ill.

The FSCS is there to cover losses in some situations if a provider goes under, not to repay you because a firm cancels the policy.

If you feel there is a problem, complain to the FOS and FCA and see what they say, they will most likely confirm what you have been told already, however.

DAVIDC

Oh dear. It would appear that you are quite happy to accept that Joe Public can,perhaps should , be ripped-off.
You state that there was no build up of costs. What do you think I have incurred over the past 33 years? For there to have been no build up of costs to me, the premiums which I have paid would have to have been refunded to me.Therefore there has been a build up of costs. Regarding car insurance, I am sure we could have a protracted debate on the whole subject of the efficacy of that market covering everything from uninsured drivers, drivers with a "poor" driving history, no claims bonuses, etc.Perhaps a subject for another time.
With regards to your statement reference the FSCS,the provider going under, and the firm cancelling the policy, has the same effect - Joe public is ripped off because, in this instance there is no regulatory protection.
With regards to the FOS & FCA, it is as a result of deficiencies within the system that PPI, for example, have been addressed and certainly not because of people sitting on their backsides and wringing their hands.