Life Insurance Ireland

life and critical illness insurance – back and neck problems – inadvertent non-disclosure

Mr F took out life and critical illness cover in June 2002. Just five months later, in November 2002, he suffered a heart attack and submitted a claim to the insurer.
However, the insurer refused to meet the claim, on the grounds that Mr F had been reckless in failing to disclose basic information on the application form. It said that after reviewing his medical records, it had discovered that Mr F failed to disclose recurrent problems with his back and neck. He had also failed to disclose that he had made a previous application for similar cover, from a different insurer. That application had never gone ahead but had been deferred, as the insurer had asked for further information which Mr F had never provided.
Mr F complained that the insurer's stance was unreasonable. He said he had simply forgotten that he had made the earlier application. And he had forgotten to mention that he had been referred to an orthopaedic consultant two years earlier for back and neck problems. He pointed out that he had mentioned on the form that he suffered from depression. He had also disclosed that his mother had heart problems. And he added that, at the time he had applied for the policy, he had been going through a particularly traumatic period caring for his wife and son, both of whom had been seriously ill.
complaint upheld
We established that Mr F's back and neck trouble had arisen after his wife had become quadriplegic, following an accident, and he had started having to lift her. And around the same time that Mr F had been referred to an orthopaedic consultant for his neck and back problems, he had been having to accompany his young son (who had a rare disease) on a number of hospital appointments.
Mr F had only the one consultation with the orthopaedic consultant, who had advised him to continue for a time with physiotherapy and medication. We accepted that, in the circumstances, Mr F had simply forgotten to mention the consultation on his application form. And we thought it understandable that Mr F had not thought he had needed to mention these back and neck problems when answering a question on the form about 'back, spine or recurrent joint disorder'. So we accepted that his failure to disclose this information had been inadvertent.
Mr F did not dispute that he had failed to disclose the earlier insurance application. He said he had simply overlooked this. At the time of this earlier application (1998), he had been fully occupied caring for his wife and family. He had not had time to follow up the insurer's queries and to provide the clarification it needed before it could proceed with his application.
In support of his case, Mr F provided a letter from his cardiologist. This said that if Mr F had been asked to undergo a medical examination when he applied for his current policy in 2002, it was unlikely that this would have led to a diagnosis of coronary heart disease.
We decided that Mr F had not shown a reckless disregard for his answers – his oversights had been inadvertent. In the circumstances, the insurer needed to make a proportionate response. In other words, it should rewrite the policy on the terms it would have offered Mr F if it had known the full facts at the outset. In this particular instance, it would have excluded spinal conditions from the disability benefits provided under the policy. It would not have excluded heart attacks or refused to cover Mr F at all.
So we said the insurer should reinstate Mr F's policy – adding the spinal condition exclusion – and deal with the claim. Since no exclusion applied to Mr F's heart attack, the firm had to pay the claim in full (less any premium refund), with interest.