The Daily Telegraph - Saturday - Money
‘Insurer tried to cancel my life cover before I was diagnosed with cancer’
Amajor life and health insurer has been found to be at fault for attempting to withdraw health cover from a group of policyholders, following the intervention of the Financial Ombudsman.
The problem came to light thanks to Telegraph Money reader Ron Creed, who raised a query about his policy terms while undergoing tests for cancer.
His “critical illness” policy was taken out in 1997 and promised to pay £100,000 on diagnosis of a range of conditions, including prostate cancer. Mr Creed was eventually diagnosed with this form of cancer.
But in August 2016 he noticed that ReAssure, an insurer that specialises in acquiring other firms’ policies, had not taken his normal £198 monthly premium.
He was told by ReAssure that his policy had been cancelled because the insurer had wrongly extended his and another group of customers’ cover four years previously. At the same time it tried to refund around £10,000 worth of premiums.
ReAssure said the policy should have ended on his 65th birthday but Mr Creed, now 71, argued that the terms and conditions suggested he could extend the cover so long as it was done before that date.
He took his case to the Financial Ombudsman Service, which deals with disputes between firms and customers – and won.
The ombudsman ordered ReAssure to reinstate the policy, consider Mr Creed’s claim and pay him £400 in compensation.
Mr Creed is locked in an additional dispute with the insurer after it agreed to pay him a sum several thousands pounds less than he believed he was due.
He said: “The rules are all about treating customers fairly, but ReAssure appears to have no understanding of that concept.
“I worry that other people with ReAssure policies may also have lost out but don’t know about it.”
ReAssure confirmed that it had contacted a “small number” of customers with critical illness insurance who, as in Mr Creed’s case, it argued should not have had their cover extended.
A spokesman said: “We accept the adjudication from the Financial Ombudsman and are in the process of finalising Mr Creed’s claim.
“We are now applying this interpretation of terms and conditions across the small number of policies with the same definition of maximum age as Mr Creed’s, and will allow customers to extend their cover as long as they inform us before their 66th birthday.”
Last year Telegraph Money’s consumer champion, Jessica Gorst-Williams, secured the reinstatement of a £35,000 ReAssure life assurance policy.
The value had fallen to nil in 2010 but ReAssure admitted it had failed to review the policy, meaning the 91-year-old reader had not been given an opportunity to review the terms.