Not upheld: Travel / life insurance claim disputes complaint against Liverpool Victoria Life Company Limited

Decision detail

Summary

Ms S complained that LV improperly included dividends in calculating her income protection benefit and unfairly refused to recommence benefit payments from April 2024. LV had previously recalculated her rehabilitation benefit following a 2023 ombudsman decision, paying an additional £12,443.07. The current ombudsman found that the policy definition of 'taxable earned income' reasonably encompasses dividends as they are taxable income Ms S actually received from her company, and that the previous ombudsman's decision implicitly endorsed this treatment. Regarding benefit recommencement, the ombudsman found the policy terms clearly require that benefit will only recommence automatically if the insurer has not paid benefit for 52 weeks or less; since more than 52 weeks had passed since Ms S's benefit ended in April 2022, she was required to make a new claim subject to the deferred period. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the policy definition of 'taxable earned income' reasonably encompasses dividends as they are taxable income that Ms S actually received from her company. The previous ombudsman's decision, which referenced Ms S's salary and dividends throughout, demonstrated an intention to include both in the income calculation. Regarding benefit recommencement, the policy terms are clear that benefit will only recommence if the insurer has not paid benefit for 52 weeks or less. Since more than 52 weeks had elapsed since Ms S's benefit ended in April 2022, she did not qualify for automatic recommencement and would need to make a new claim subject to the deferred period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website