Insurer has to pay for return of cancer

A cancer survivor has chalked up a victory against an insurer who refused to pay her out for dread disease after she was diagnosed with the illness for a second time.

Judge Ron McLaren‚ ombudsman for long-term insurance‚ ordered Alexander Forbes to pay the woman for her second claim‚ saying in the absence of an exclusion clause‚ “there is no legal or insurance principle which prevents an insured person from claiming under two different policies for recurrence of a condition”.

The woman was diagnosed with breast cancer in 2013.

A claim was paid to her under a policy underwritten by another insurer.

She underwent a mastectomy in 2014 followed by radiation therapy.

From May 2015 the woman was covered by her employer’s group risk policy for dread disease‚ underwritten by Alexander Forbes.

In October that year‚ she was diagnosed with liver metastases and stage four breast cancer‚ for which she submitted a claim to Alexander Forbes.

The insurer first relied on the pre-existing exclusion clause which stated: “No dread disease benefit shall be payable under this policy during the first 12 months of a life assured’s commencement date if‚ in the opinion of the insurer‚ the dread disease claim is attributable to any injury or illness during the [half-year before] the commencement of his becoming a life assured.”

The ombudsman requested Alexander Forbes to provide the medical evidence it had relied on. None was provided.

Alexander Forbes said group risk insurance contracts were generally accepted on the same terms by the new insurer as the previous insurer‚ so as not to disadvantage the policyholder.

“In agreeing to take over her benefit on the same terms and conditions as per previous cover effectively meant that Alexander Forbes would need to keep its decision consistent with the previous insurer‚” the company said.

Alexander Forbes also said it was not aware of her previous claim for the same disease.

McLaren said the woman had been under the impression that she was in remission and that the Alexander Forbes policy was a new contract‚ not a continuation.

Alexander Forbes has paid the woman’s claim. –