Cancer, mistaken for gym injury, voids claim
A New Zealand woman had her medical insurance claim declined because of breast cancer she did not know was there.
The woman, identified by disputes resolution scheme Financial Services Complaints Ltd (FSCL) only as Annie, went to her doctor about a painful lump on her breast.
The same day, her partner met with an adviser to discuss shifting to a new medical policy.
Annie’s doctor referred her to a specialist, but, because the pain subsided, she assumed it was a gym injury and did not pursue it.
The adviser sent the couple application forms for a new medical insurance policy and asked them to let him know if there were changes to their health.
Annie did not disclose any medical issues and her policy was replaced with a new one.
Within a year, it was discovered Annie had breast cancer.
She made a claim but, when the insurer looked at her medical notes, it found the specialist referral and refused to pay.
Annie and her partner complained to FSCL, saying their insurance adviser had not fully explained the importance of disclosing health issues, nor how much information was needed.
But FSCL sided with the insurer and adviser.
‘‘We did not think Annie deliberately hid her breast lump consultation from the insurer. She probably did not think it was relevant. But the failure to disclose it was material,’’ it said.
‘‘If Annie had disclosed it when she applied for medical insurance, the insurer would have deferred cover until all investigations were complete. ‘‘If she had disclosed it to the adviser, the adviser would likely have advised Annie not to change insurers due to the risk of the new insurer declining a claim due to a preexisting condition.’’ It was one of 245 cases the scheme investigated and resolved in the past year.
FSCL reported a 35 per cent increase in complaints in the year to June 30.
Complaints about insurers made up the greatest proportion of cases, and travel insurance was the biggest category within that.
FSCL chief executive Susan Taylor said the issue of nondisclosure, as in Annie’s case, was an important one.
‘‘The lesson is that if in doubt, disclose, disclose, disclose. Consumers should ask their insurer or broker for help if they’re not sure whether a previous offence needs to be disclosed.’’
The scheme negotiated compensation awards totalling $575,274 in the year.
The largest individual settlement was $86,000.