Critical Illness Payout

Coffee10

My husband has been diagnosed with terminal cancer. He has a critical illness policy with LV and Aviva. The LV was taken out before the Aviva in May 2022. At the time of taking out the Aviva policy the nurse registered a slightly raised blood pressure, this was then followed up with the GP who just said fine just need to make some lifestyle adjustments but no big deal. We have since submitted the claim to LV who requested all the information from Aviva which we openly did. They have said because that my husband failed to inform them of the slightly elevated blood pressure reading (really didn't realize this was an issue at the time) which then has meant he has underpaid the monthly payments by £150 per month (56%) they are going to reduce the payout by 56% (over £100k).  Blood pressure is completely unrelated to his cancer. This feels incredibly exploitative as well as morally awful. We had agreed we would pay the shortfall of the monthly payments but to reduce the entire payout by 56% because of this is incredibly distressing. Does anyone have similar experience or can advise how we can go about challenging this?

Mark_d

I'm surprise the claim was not denied completely.  Your husband has a health condition (raised blood pressure) which was not declared.  This is in breach of the policy terms and conditions.

As it happens I have, this week, been diagnosed with slightly raised blood pressure.  Like your husband, I have also been told that it can be managed by making lifestyle adjustments.  I called my insurance company and informed them straight away, as required by the policy. They said that until the cause of the high blood pressure is known, any claim on my policy would be denied.

Weighty1

Coffee10 said:

My husband has been diagnosed with terminal cancer. He has a critical illness policy with LV and Aviva. The LV was taken out before the Aviva in May 2022. At the time of taking out the Aviva policy the nurse registered a slightly raised blood pressure, this was then followed up with the GP who just said fine just need to make some lifestyle adjustments but no big deal. We have since submitted the claim to LV who requested all the information from Aviva which we openly did. They have said because that my husband failed to inform them of the slightly elevated blood pressure reading (really didn't realize this was an issue at the time) which then has meant he has underpaid the monthly payments by £150 per month (56%) they are going to reduce the payout by 56% (over £100k).  Blood pressure is completely unrelated to his cancer. This feels incredibly exploitative as well as morally awful. We had agreed we would pay the shortfall of the monthly payments but to reduce the entire payout by 56% because of this is incredibly distressing. Does anyone have similar experience or can advise how we can go about challenging this?

Sorry to hear about you and your husbands situation.

So the slightly elevated raise BP was diagnosed before your husband took out the LV policy but NOT before he took out the Aviva?

Was the raised BP disclosed on either application?

In respect of what LV have done, this is completely in line with what inndustry requirements are.  Ultimately, if your husbnd should've been paying a higher premium the insurer is allowed to calculate how much cover they would have provided based on the paid premium.  This is infinitely better than not receiving a payout, which could have been the past outcome.

Coffee10

@Weighty1 correct the blood pressure was not present at the time of taking out the LV it was picked up on later by the nurse who did the check for Aviva around a year later. Noted it is line with standards but seems incredibly harsh.

DullGreyGuy

Consumer Insurance Disclosure and Representations Act is the legislation that covers this matter, it effectively says:

1) Customer carelessly gives wrong information/fails to give information then
1.1) if the policy would have been available at an adjusted premium then claim has to be honoured but reduced by the percentage underpayment of premiums
1.2) if the policy wouldn't have been available then the policy is cancelled and claim declined

2) Customer recklessly gives wrong information/fails to give information then the policy is voided and the claim can be avoided

There is no requirement for the incorrect/missing information to be in any way related to the claim. 

Mark_d said:

I'm surprise the claim was not denied completely.  Your husband has a health condition (raised blood pressure) which was not declared.  This is in breach of the policy terms and conditions.

They can only deny the claim if they can show the insured was reckless, given they've quoted a higher premium for someone with higher blood pressure they are accepting it was careless instead and would have offered cover so must pay the claim but can do so at a reduced rate. 

Coffee10 said:
They have said because that my husband failed to inform them of the slightly elevated blood pressure reading (really didn't realize this was an issue at the time) 

Why did he decide not to declare it?

Your only defence is to show that a lay person reading the questions would honestly think it does not have to be declared so its useful to see exactly how the question was worded and any helper/guidance notes that came with it on how to answer. 

Unfortunately in most these cases the questions are clear and it's an issue that the consumer decided to apply their own logic to what the underwriter may consider relevant or not rather than answer the question asked. 

born_again

Do the T/C of the LV policy state that they need to be informed of such changes?

Raise a complaint. You can then got to FOS if not resolved to your satisfaction & FOS will make a judgment on the case. 
Will not be quick.

dunstonh

They have said because that my husband failed to inform them of the slightly elevated blood pressure reading (really didn't realize this was an issue at the time) which then has meant he has underpaid the monthly payments by £150 per month (56%) they are going to reduce the payout by 56% (over £100k).  Blood pressure is completely unrelated to his cancer. This feels incredibly exploitative as well as morally awful.

I know you are going through a difficult time.   But, it is fair and reasonable.       If they had classed it as intentional non-disclosure, then they would not pay a penny and keep the premiums.    However, what they have done is say this is what the sum assured would have been for the premium being paid had the blood pressure had been disclosed.  There is no wrongdoing there.

However, I question the timeline.    Medical conditions that occur after commencement should not apply to policies already in force.  So, if the LV policy was taken out before GP records or Aviva first found out about the blood pressure, then it shouldn't have an impact.     What was the gap between applying for the LV policy and the Aviva policy?   If LV was in the period between the application and commencement date, you are required to notify them of any medical information change.

DullGreyGuy

born_again said:

Do the T/C of the LV policy state that they need to be informed of such changes?

Raise a complaint. You can then got to FOS if not resolved to your satisfaction & FOS will make a judgment on the case. 
Will not be quick.

You aren't required to tell them about changes @born_again, the issue is the OP had high blood pressure before taking the policy out and failed to declare it when getting their quote. 

Coffee10

@dunsonh thank you that helps. We are checking the timelines to see if our error was not to inform them before the policy went on risk. It could be that marginal timeline has sadly made all the difference. It certainly wasn't an intentional omission on our part but accept if we didn't strictly follow the rules.

Coffee10

@Nearlyold no he did not know at the time of taking out the LV policy however it looks like Aviva nurse checks picked it up before the LV finished fully completing and going on risk ( although we had done all the required paperwork etc it wasn't actually finalized). They are saying we should have told them what Aviva discovered.

born_again

DullGreyGuy said:

born_again said:

Do the T/C of the LV policy state that they need to be informed of such changes?

Raise a complaint. You can then got to FOS if not resolved to your satisfaction & FOS will make a judgment on the case. 
Will not be quick.

You aren't required to tell them about changes @born_again, the issue is the OP had high blood pressure before taking the policy out and failed to declare it when getting their quote. 

OP said The LV was taken out before the Aviva in May 2022. 

So I took this to mean the policy was already in place when taking out the Aviva one.

But seems odd to have 2 critical illness policies.

Perhaps OP could confirm exactly when LV policy was taken out 👍