An income protection (IP) customer whose policy was cancelled when he tried to make a claim has had his complaint rejected by the Financial Ombudsman Service (FOS) for failing to fully disclose his medical history.
The regulator agreed with the insurer that the customer had misrepresented his medical background when applying for the policy and noted “it was clear he hadn’t answered all the insurer’s questions accurately”.
The policyholder, named as Tomasz, contacted the FOS after his insurer turned down an income protection claim because he had misrepresented his medical history.
Tomasz said he’d been unable to work for six months as a result of a serious accident but his insurer declined his claim, cancelled his policy and returned his premiums saying he hadn’t correctly disclosed previous medical issues when buying his policy.
‘Hadn’t answered questions accurately’
After investigating with both parties the FOS said it was clear Tomasz hadn’t answered all the insurer’s questions accurately.
“In particular, he hadn’t disclosed that he’d previously been treated for high blood pressure and cholesterol, or that he’d had abnormal test results relating to his heart,” it said.
Tomasz told the FOS he hadn’t given the right information about his test results, but said he had not had the results to hand, and did not remember they had been abnormal.
He also said he had not taken medication for these conditions for some time, and they were not relevant to his claim.
“We explained to Tomasz that, in our view, he hadn’t taken reasonable care to answer the insurers’ questions correctly,” the FOS continued.
“Though he might not have remembered his test results, he could have tried to find out if he wasn’t sure. So we agreed with the insurer that he’d made a qualifying misrepresentation under The Consumer Insurance (Disclosure and Representations) Act 2012.”
The insurer subsequently provided evidence to show it would not have offered Tomasz the policy if he’d answered the medical questions accurately.
“Given what we’d seen, we thought the insurer had acted fairly – and didn’t uphold the complaint,” the FOS concluded.
In its latest data, published last month, the FOS revealed it received 1,054 new complaints about income protection insurance in 2020-21, up by 20% from 877 the previous year.
However, the rate of complaints being upheld dipped slightly to 19% of health complaints from 21%.
