Critical Illness Claim Refused by Insurance Co – Type 1 Diabetes, FCA Breaches & Neurodiversity Conc

NotNigel

Hi everyone,

I’m reaching out for support and advice following a difficult experience with my Critical Insurance Provider and the Financial Ombudsman Service. I’m hoping others may have faced something similar or can recommend a way forward.

Background

I took out a critical illness policy in 2022 via a price comparison site (non-advised). In 2024, I was diagnosed with Type 1 Diabetes and submitted a claim. My Insurer declined it, stating the condition wasn’t covered under my policy.

What I didn’t know at the time — and only found out after the claim — was that in 2023, my Insurer introduced an updated policy which did include Type 1 Diabetes. But this enhancement was never communicated to existing customers, and my policy (now a closed product) remained on inferior terms without my knowledge.

Requesting Terms and Conditions — Before the Claim

In February 2024, months before making my claim, I emailed my Insurer specifically asking for the full terms and conditions of my policy.

On two separate occasions — including once at the start of my policy — I was sent the “Terms of Acceptance”, which is a different document and does not contain the full list of covered conditions or exclusions.
Despite this, my Insurer told the Ombudsman that the full terms were “likely” sent — and the Ombudsman accepted that without engaging with the actual documents I submitted as evidence.

Key Concerns

• FCA rules and ICOBS guidance seem to have been breached, particularly around providing fair, clear and timely information, and treating long-standing customers fairly under FG16/8.

• The Ombudsman accepted my Insurer's internal assumptions over my documented proof — no explanation was given for why my factual evidence was not considered.

• The process did not properly account for the fact I am now diagnosed as neurodivergent (ASD) — which impacts how I process complex communication.

• My Insurer failure to inform me of materially improved cover deprived me of the opportunity to switch to a more suitable policy before my diagnosis.

What I Need Help With

• Has anyone successfully challenged a declined claim based on failure to notify of updated policy options?

• Have you been able to overturn an Ombudsman decision or escalate it through another channel (e.g. court or independent assessor)?

• Can anyone recommend solicitors or charities with experience in:

  • Critical illness disputes

  • Disability discrimination in financial services

  • Holding insurers accountable under FCA rules?

This experience has been mentally exhausting and has left me questioning why a consumer’s documented facts seem to carry less weight than an insurer’s internal narrative.

Any advice, shared experiences, or signposts would mean a lot. Thank you.

DullGreyGuy

Is the FOS decision by an adjudicator/investigator? If so then you can reject their decision and ask for the case to be escalated to an ombudsman. 

If it has already been to an ombudsman can you provide the case number? All cases reviewed by ombudsman are published online in an anonymised way (eg https://www.financial-ombudsman.org.uk/decision/DRN-5200488.pdf). That said a quick check on their site doesnt show any recent cases that seem to match your version above. 

Which insurer is it?

NotNigel said:

What I Need Help With

• Has anyone successfully challenged a declined claim based on failure to notify of updated policy options?

• Have you been able to overturn an Ombudsman decision or escalate it through another channel (e.g. court or independent assessor)?

• Can anyone recommend solicitors or charities with experience in:

  • Critical illness disputes

  • Disability discrimination in financial services

  • Holding insurers accountable under FCA rules?

This experience has been mentally exhausting and has left me questioning why a consumer’s documented facts seem to carry less weight than an insurer’s internal narrative.

Any advice, shared experiences, or signposts would mean a lot. Thank you.

Protection insurance, a group of long term classes of business, typically doesnt change during the life of the policy. Many of the complaints on the ombudsman website are the mirror of yours, that customers see that newer versions of the product cover conditions that their older policies dont and they complain that their policy isnt expanded to also include these new conditions. Thats not how CI typically works and all of those complaints are not upheld. 

The first escalation is to go from an Adjudicator to an Ombudsman, this can be done by either the customer or the insurer. The Ombudsman decision is binding on the insurer but a customer doesnt have to accept it. After that the only recourse is the court for a customer but success rates are tiny (so tiny I've never seen a single case in nearly 20 years) because the ombudsman remit is to find "fair" outcomes whereas a court blindly follows the law. 

NotNigel said:

• The Ombudsman accepted my Insurer's internal assumptions over my documented proof — no explanation was given for why my factual evidence was not considered.
  

What is your evidence that you didnt receive it? It's exceptionally difficult to prove something doesnt exist or you never had it. 

I dont know who the insurer is or what systems they use but in multiple companies I've worked with every document sent to a customer is scanned so you have a very high confidence factor that something was sent but ultimately nothing in the world is infallible and its humanly possible that a document was scanned as being put into the envelope but somehow/somewhere fell out before it reached you. 

dunstonh

It is worth noting that when CIC plans are updated to a new version, conditions may be added to the new version, but also conditions that were present in older versions can be removed from the new version.   It is not automatic that a new version is better than an old version. 

Unless you are paying the insurer to provide ongoing services to review your plans (which you are not as no insurers offer it), the insurer has no requirement to tell you of new versions.     If you are paying a financial adviser or a broker to provide ongoing services on your plans, then they have the responsibility to check for ongoing suitability.  However, you say you used a comparison site.   So, you carry the responsibility for that.

Effectively, if you bypass advisers/brokers and opt for DIY, then you take on that responsibility, just like any other form of DIY.

NotNigel

The insurer is Royal London. The outcome was initially from an investigator and then confirmed/agreed by an Ombudsman. This was only in the last week so probably hasn't been updated to their website yet. I have requested that this be escalated as the evidences I provided do not seem to have been considered.

The evidence I have - 2 emails received on the dates RL say they sent me the T&Cs which clearly show that the Terms of Acceptance were sent instead. A recent email from RL states the T&Cs were 'probably never sent as customers don't usually request them.

RL have also evidenced that the letter they sent to me, which they said contained the T&Cs were sent to an incorrect address, solely their error. They have also said they emails they sent are no longer available on their system due to GDPR so they can't evidence sending. I have saved all emails so can evidence where they say they send the docs they in fact haven't. Thus is where the Ombudsman has taken RLs assumption over my fact.

Regarding comments about my obligations to review my policy, doesn't FG16/8 show that customers on closed book policys need to be treated fairly. The obligation is on the insurer to communicate new policys which may give customers a better outcome. RL at first claimed it was my IFA who sold me the product's obligation and then backtracked to say the information was provided on their website, a fact that I have proved to be incorrect.

I really welcome and appreciate everyone's thought on this

 

user1977

On the disability discrimination point - did they know about it? They can't make reasonable adjustments for needs which they haven't been told about.

NotNigel

@user1977 - To clarify: I wasn’t diagnosed with Type 1 Diabetes until after Royal London had already updated their critical illness policy to include it as a covered condition (on newer policies). So, when I was diagnosed, they did know that I had Type 1 Diabetes — it was the reason for my critical illness claim.

While they didn’t know in advance that I would be diagnosed (or me!), once they were notified (via the claim), the nature of the condition is such that it qualifies as a disability under the Equality Act 2010. That means it should have triggered vulnerable customer considerations, and at the very least prompted a fair and thorough review of whether their communication failures had placed me at a disadvantage — which I believe they did.

For example:

• They never informed me that enhanced versions of the policy (which cover Type 1 Diabetes) were now available.

• These new policies had replaced the one I was on — mine had become a closed product, and I had no way of knowing I could switch.

• Under FCA guidance (specifically FG16/8), insurers are expected to inform customers in closed books if remaining in those products could lead to a worse outcome.

• I had also requested the full Terms and Conditions twice before my diagnosis, and was wrongly sent a different document (Terms of Acceptance) on both occasions. Royal London only sent me the T&Cs, including exclusions, once they had declined my claim.

So, while Royal London couldn’t have predicted my diagnosis, once they were informed of it — and it was clear that my policy no longer met my needs — they had a responsibility under FCA rules and the Equality Act to consider whether I had been unfairly disadvantaged.

Unfortunately, both Royal London and the Ombudsman have so far dismissed the Equality Act relevance, even though my condition is recognised as a disability.

NotNigel

@DullGreyGuy @dunstonh

The insurer is Royal London. The outcome was initially from an investigator and then confirmed/agreed by an Ombudsman. This was only in the last week so probably hasn't been updated to their website yet. I have requested that this be escalated as the evidences I provided do not seem to have been considered.

The evidence I have - 2 emails received on the dates RL say they sent me the T&Cs which clearly show that the Terms of Acceptance were sent instead. A recent email from RL states the T&Cs were 'probably never sent as customers don't usually request them.

RL have also evidenced that the letter they sent to me, which they said contained the T&Cs were sent to an incorrect address, solely their error. They have also said they emails they sent are no longer available on their system due to GDPR so they can't evidence sending. I have saved all emails so can evidence where they say they send the docs they in fact haven't. Thus is where the Ombudsman has taken RLs assumption over my fact.

Regarding comments about my obligations to review my policy, doesn't FG16/8 show that customers on closed book policys need to be treated fairly. The obligation is on the insurer to communicate new policys which may give customers a better outcome. RL at first claimed it was my IFA who sold me the product's obligation and then backtracked to say the information was provided on their website, a fact that I have proved to be incorrect.

I really welcome and appreciate everyone's thought on this

HappyHarry

I am sorry to read your posts, it is far from an ideal situation.

However, the bottom line is you took out a long-term insurance policy that did not cover your condition.

The fact that the provider has since created a different policy that does cover your condition is neither here nor there. The provider is not obligated to inform all their clients of any new products that they make available.

Had you known about the new product, you could have applied for it, and would have had to go through underwriting as part of the application. You may then have been or not been accepted.

I recognise that you feel unhappy about the situation , but I don’t see that the provider has done anything wrong.

DullGreyGuy

NotNigel said:

@DullGreyGuy @dunstonh

The insurer is Royal London. The outcome was initially from an investigator and then confirmed/agreed by an Ombudsman. This was only in the last week so probably hasn't been updated to their website yet. I have requested that this be escalated as the evidences I provided do not seem to have been considered.

The evidence I have - 2 emails received on the dates RL say they sent me the T&Cs which clearly show that the Terms of Acceptance were sent instead. A recent email from RL states the T&Cs were 'probably never sent as customers don't usually request them.

RL have also evidenced that the letter they sent to me, which they said contained the T&Cs were sent to an incorrect address, solely their error. They have also said they emails they sent are no longer available on their system due to GDPR so they can't evidence sending. I have saved all emails so can evidence where they say they send the docs they in fact haven't. Thus is where the Ombudsman has taken RLs assumption over my fact.

Regarding comments about my obligations to review my policy, doesn't FG16/8 show that customers on closed book policys need to be treated fairly. The obligation is on the insurer to communicate new policys which may give customers a better outcome. RL at first claimed it was my IFA who sold me the product's obligation and then backtracked to say the information was provided on their website, a fact that I have proved to be incorrect.

I really welcome and appreciate everyone's thought on this

Its not a closed book, that is where an insurer has stopped selling a class of business; RL do still write CI just on different terms. At most you'd describe it as a legacy product but in most cases insurers just iterate products (most are updated at least once in 12-18 months) and whilst its old terms they would consider them legacy. 

Did you read the linked case in the original reply? You will see there that the PH complained about not knowing a newer better policy was available to new customers from Royal London (coincidentally) but the Ombudsman confirmed that RL have no obligation to inform customers:

For the avoidance of doubt, Royal London isn’t obliged advise existing policyholders of new products or cover, or even to offer cover greater than that set out in the Association of British Insurers’ Guide to Minimum Standards for Critical Illness Cover. The cover provided by Mr M’s policy accords with the relevant Guide and is as set out in his policy booklet and priced accordingly.

 FG16/8 is also an odd one to quote given:

The products in scope of this guidance are individual personal pensions (including SIPPs and Retirement Annuity Contracts), whole-of-life (individual), endowments and investment bonds. These products can be provided either as with-profits investments or non-profit investments (particularly unit-linked). 

Whilst it does go on to say "However, product providers and intermediaries should also consider the guidance in informing their practices and processes in respect of all products, including actively marketed products, in which long-standing customers are invested, as many of the same issues will arise." the important part is the bold text. CIC is not an investment product unlike the others listed, it's a pure insurance product. 

dunstonh

The insurer is Royal London. The outcome was initially from an investigator and then confirmed/agreed by an Ombudsman. This was only in the last week so probably hasn't been updated to their website yet. I have requested that this be escalated as the evidences I provided do not seem to have been considered.

If the ombudsman has issued a final ruling then its pretty much game over.   You get the opportunity to provide more info to both the investigator before they make their ruling and to the ombudsman before they make theirs.     There may be some back and forth but once the ruling is made, its pretty much game over once an ombudsman decision has been made.

Regarding comments about my obligations to review my policy, doesn't FG16/8 show that customers on closed book policys need to be treated fairly.

They are treating you fairly.  They are honouring the terms agreed at purchase.   If this is an RL original policy (and not a legacy brand they have inherited) then its not a closed book.   

 The obligation is on the insurer to communicate new policys which may give customers a better outcome. 

No its not.

 RL at first claimed it was my IFA who sold me the product's obligation and then backtracked to say the information was provided on their website, a fact that I have proved to be incorrect.

They were right first time.   The retailer is responsible for the bulk of the information provided at point of sale.  You used a comparison site.  So, the comparison site should have had download links available for the documentation.

While they didn’t know in advance that I would be diagnosed (or me!), once they were notified (via the claim), the nature of the condition is such that it qualifies as a disability under the Equality Act 2010. That means it should have triggered vulnerable customer considerations, and at the very least prompted a fair and thorough review of whether their communication failures had placed me at a disadvantage — which I believe they did.

You would have to demonstrate why you think type 1 diabetes makes you vulnerable.  Just having diabetes isn't enough.  RL pretty much have very little communication with you at point of sale beyond confirming acceptance and issuing policy documents.   The rest of the point of sale communication is handled by the retailer.  

Once a plan is set up, there is very little communication after that unless you make a claim.   Those making claims on a CIC policy nearly always get classified as vulnerable by default.

For example:
They never informed me that enhanced versions of the policy (which cover Type 1 Diabetes) were now available.
These new policies had replaced the one I was on — mine had become a closed product, and I had no way of knowing I could switch.
Under FCA guidance (specifically FG16/8), insurers are expected to inform customers in closed books if remaining in those products could lead to a worse outcome.
I had also requested the full Terms and Conditions twice before my diagnosis, and was wrongly sent a different document (Terms of Acceptance) on both occasions. Royal London only sent me the T&Cs, including exclusions, once they had declined my claim.

a) they don't need to inform you of a new policy version.  That is a misconception on your part.
b) they are not responsible for what you do and don't know regarding options.    
c) The closed book reference is a red herring and won't apply here.

Poor quality admin may be worth a £100 or so  as a goodwill gesture.

So, while Royal London couldn’t have predicted my diagnosis, once they were informed of it — and it was clear that my policy no longer met my needs — they had a responsibility under FCA rules and the Equality Act to consider whether I had been unfairly disadvantaged.

I'm afraid that is wrong on counts
1 - the policy still met your needs and still covered you in the same areas it did when you bought it.
2 - equality act does not apply.
3 - no FCA rules impact on what you are saying.

Unfortunately, both Royal London and the Ombudsman have so far dismissed the Equality Act relevance, even though my condition is recognised as a disability.

They are correct to dismiss it as not one thing you have said so far suggests no issue in that respect.

Do remember that those of us responding have no emotional attachment to this scenario.   Many of the responders have first-hand experience with insurers, both good and bad.     If we saw wrongdoing, we would point it out as we have done on many threads over the years.    However, there appears to be no wrongdoing, and you are basing your hopes on misconceptions.

user1977

NotNigel said:

Unfortunately, both Royal London and the Ombudsman have so far dismissed the Equality Act relevance, even though my condition is recognised as a disability.

It was your earlier reference to neurodiversity I was talking about.