Not upheld: claim settlement dispute - timing of benefit payment and application of policy definition complaint against Legal and General Assurance Society Limited

Decision detail

Summary

Mrs V claimed on a critical illness insurance policy taken out in 2009 following diagnosis of a benign brain tumour in October 2024 and subsequent surgery in February 2025. L&G paid the claim from 21 July 2025, when medical evidence confirmed Mrs V met the policy's definition requiring permanent neurological deficit, rather than from the October 2024 diagnosis date. Mrs V was unhappy as the decreasing term policy meant she received approximately £6,000 less than if payment had been backdated to October 2024, and she felt misled by a June 2025 call with L&G's claims handler. The ombudsman upheld L&G's settlement date as fair, finding the policy definition required permanent neurological deficit which was only confirmed in July 2025, and found the £200 compensation already paid for unclear information was reasonable.

The Ombudsman's reasoning

The ombudsman found that L&G fairly applied the 2009 policy terms under which Mrs V was covered. The policy definition of benign brain tumour required permanent neurological deficit with persisting clinical symptoms, not merely diagnosis. L&G was entitled to wait for sufficient medical evidence to confirm this definition was met, which occurred on 21 July 2025 when the neurosurgeon's report documented permanent hand coordination loss. The ombudsman rejected the argument that L&G should backdate to October 2024 or apply newer policy definitions, as the original policy terms were clear and fair. While acknowledging the call handler's failure to clearly explain when claims become payable, the ombudsman found the £200 compensation already paid was proportionate and that L&G should not be required to make a misrepresentation true by paying the difference in benefit amounts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website