Tuesday, November 8, 2016

Legal & General Life Cheats

Latest fight: Andrew Preston was told by his doctor he had terminal cancerLegal & General has been caught out again overruling a terminal illness diagnosis to wriggle out of paying a life insurance claim. In early February, Andrew Preston was told by his doctor he had terminal cancer and had just a year to live. Under the terminal illness clause of his life insurance policy, the 61-year-old should have been entitled to a payout of £160,000.

But L&G refused to pay, claiming its doctor — who had never even spoken to Andrew — believed he would live for longer than 12 months. This is the third time in two years that Money Mail has exposed the way L&G has listened to its medical advisers, rather than the customer's own specialist, in order to duck out of paying a claim.

To make matters worse, the longer L&G delayed paying Andrew's claim, the less money he would receive because his payout is designed to shrink every month. Andrew, who lives in Shropshire, took out the policy to clear the mortgage in case something ever happened to him. 

So when he learned he had terminal rectal cancer that had spread to his liver, he called the insurer to make a claim on it. When L&G wouldn't pay, Andrew contested the decision — but to absolutely no avail. 

As a self-employed businessman, Andrew has no company sick pay to fall back on, only a small monthly sum from the Government to keep him going. Without the money from L&G, he would have no choice but to sell his home.

Andrew, who has a 27-year-old daughter, says: 'When I called to claim, a woman simply repeated the policy conditions over and over and basically told me they weren't going to pay.
"There was no compassion there at all. I didn't understand it, as they have to pay out when I die anyway.'

The type of policy Andrew took out is known in the industry as a decreasing term insurance policy. This means the payout grows smaller each year as the mortgage is slowly paid off.
Over the past 12 months, the Financial Ombudsman has received 100 complaints about L&G term life insurance policies — 90 more than the average in the industry.

L&G has had the sixth most term insurance complaints in the past year. In 18 of these cases, customers were complaining about policy terms. Andrew's experience is almost identical to that of another L&G customer, Michael Brown, who contacted Money Mail for help in March 2015.

Michael had been diagnosed with bile duct cancer and told he was unlikely to survive the year. 
But, just as with Andrew, when he tried to claim under the terminal illness clause of his life insurance policy, L&G refused to pay, arguing that its medical assessors believed he could live longer than 12 months.

It was only after we intervened that the insurer agreed to pay Andrew's claim.
In February this year, L&G used the same excuse to deny Violeta Beaver's claim.
Violeta, 63, had been told by her cancer specialist that she had less than six months to live. 
But when she tried to claim on her life insurance policy, L&G once again refused to pay the £130,000 she was owed, until we stepped in.

When we tried to alert the City regulator to our findings, it said there was no way of reporting an individual firm for poor practices such as these. 

A spokeswoman for the Financial Conduct Authority says: 'We are unable to comment on individual firms. However, we expect all firms to treat their customers fairly.'
L&G has since agreed to backdate Andrew's claim to July and pay him more than £162,500, including interest and £1,500 in compensation.

A spokeswoman for the insurer says: 'We have every sympathy with Mr Preston.
'We accept that his condition is terminal, but we have to establish that his circumstances did meet the terms of our policy, which would allow us to make a payment of his claim.'



 

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