Critical illness and income protection policies totally overlapped?

j6h

Thanks again Weighty1.  My experience is a bit different.  I was taken seriously ill last year and spent a month in hospital followed by another 3 weeks at home convalescing. 

I was convinced I was well on the road to recovery and my GP said I could return to work if I wanted to, but only for a few hours a day.  I wasn’t enjoying enforced idleness at home and since company sick-pay was only at the discretion of the MD I decided to go back into the office.  (It turns out that my employer had decided to pay me sick-pay but nobody had thought to tell me.) 

After a few months I was back working full-time, though if I’m honest still not up to full-strength.  Sadly the business hit a rough patch and I was offered redundancy.  (I say “offered” but it was pretty clear that if I had declined then my role would have been “made redundant” on less-favourable terms.)  I took the redundancy offer, confident that I would soon find a similar job elsewhere. 

Less than a month after that I had a routine follow-up with a hospital consultant who broke the news that there would be ongoing consequences of the original illness.  I feel absolutely fine and fit for work right now but there’s no guarantee that I won’t suddenly be taken ill again.  I’m not allowed to drive for at least a year and it’s safer if I don’t travel unaccompanied by public transport.  And it’s not just a “theoretical” risk; it has since happened a couple of times, though fortunately help was at hand and I soon recovered. 

I contacted my income protection insurers but they said that I had no grounds for a claim because I had been able to perform some part of my occupation when I went back to work part-time.  They also said that since I have taken redundancy I have no income to protect.

On the positive side, my critical illness insurers have finally agreed my claim but I have yet to see any money from them.  And as others have said, it’s a lump-sum rather than a replacement for the income I’d have earned over the next dozen years. 

That’s all led me to question the value of my income protection plan, particularly the "able to perform no part of the occupation" criterion for making a claim. 

I’m not quite sure what you mean by the “suited occupation" or "any occupation" definition of incapacity though.  My policy specifically refers to the occupation I was employed in immediately prior to being taken ill. 

Weighty1

So, what the insurers have done appears completely just and above board.  Firstly, as you say in your own words "you feel absolutely fine and fit for work right now" so the insurers would be right to not pay out on the plan.  They are also correct that since you took the redundancy you are not in a position to claim because you were not in paid employment (nor were you ill from the sounds of things).  You cannot insurer yourself for something which you do not have eg. if you were unemployed and tried to take out a new IP policy then you wouldn't be able to in most cases.

These risks you mention are no different than the risks that I face or could face as a T1 diabetic.  If I have too much insulin I could easily go hypoglycaemic and collapse, and have indeed done so many years ago.  However, an isolated event like that would not make me unfit for work IF I was able to recover quickly, which it seems you are in your case as well.

Did the insurer make a partial payment to you on the income protection when you were only able to work part-time?  It'd be worth questionning if this was possible.

In regards to "suited" or any" occupation definitions these are moot points if it was based on your occupation prior to incapacity but suited means any job which you are trained to do based on experience and qualifications and any occupation means just that.  Can you do any occupation at all.

j6h

Not exactly…

The risks I face are not totally dissimilar to T1 diabetes but the onset is much more sudden than the hypoglycaemia I’ve witnessed in colleagues.  They usually felt some warning signs, or displayed enough irritability, that someone realised what was going on and could fetch a Mars bar from the canteen.  I don’t get any warning of an attack and collapse to the floor within seconds.  Apparently I sometimes stop breathing once unconscious.  Fortunately when this has happened I’ve been with people who know what to do.  I usually regain consciousness within a few minutes but it’s recommended that I go to A&E just to make sure I’m OK and check that the attack isn’t an indication that my condition has somehow changed. 

That rather rules-out a lot of the routine travel I undertook for work pre-Covid.  Apart from anything else, I can’t get travel insurance for this pre-existing condition; I (or my employer) might be faced with prohibitive hospital fees outside Europe.  If I’m taken ill at home or in the office then I’d hope that someone would notice and help me.  It would be more disruptive if it were to happen on a plane or train or in a meeting, and things might turn-out much worse if I were alone in a hotel-room.  If I’m alone I don’t want to be anywhere near the edge of a railway or underground platform, and I suppose a lot of other people might get hurt if I were to collapse at the bottom of a long down-escalator. 

While I could still do the office part of my job the insurance wouldn’t pay out on the plan.  However, travel within the UK and overseas was an integral part of my last role.  That’s where, with hindsight, I’m beginning to question the "able to perform no part of the occupation" criterion for a claim.  If I’d spotted that clause and could have imagined the condition I now have I wouldn’t have bought the policy. 

The redundancy does rather muddy the waters.  If the diagnosis had come before the offer of redundancy then things would have been much simpler.  However, at the time I was reasonably convinced that I’d made a pretty-much full recovery.  Post-diagnosis I’m not nearly so employable, so getting another job is proving hard.  At the moment I’m also questioning whether it would be wise for me to commute to work (either daily to London or weekly further afield) when the job I’ve left was only a short walk from home.  And for the next year any job that involves driving between sites or to visit UK customers is out of the question. 

I can’t see that I’d qualify for a partial payment on the income protection plan because the initial illness, convalescence and the part-time working combined only lasted a few weeks longer than the policy deferral period.  My employer was also good enough to pay me in full regardless. 

I don’t think my policy was either “any occupation” or “suited”.  It specifically refers to the job I was in prior to being taken ill.  That’s totally specific in one sense, but would have applied to any job that I might have been doing.