Not upheld: unfair claim decline based on moratorium clause application complaint against Vitality Health Limited

Decision detail

Summary

Mr S complained that Vitality Health Limited unfairly declined his lung cancer claim under a private medical insurance policy with a five-year moratorium clause. Vitality declined the claim because medical evidence showed a lung nodule had existed and been under surveillance in the five years before his April 2023 policy commenced, even though Mr S was not formally diagnosed with lung cancer until January 2026. The ombudsman upheld Vitality's decision to decline the claim, finding the moratorium clause clearly applied as Mr S was aware of the abnormality and it had undergone ongoing surveillance during the pre-policy period. However, the ombudsman acknowledged Vitality's service failures in communication and managing expectations, and upheld the firm's offer of £100 compensation for these administrative shortcomings.

The Ombudsman's reasoning

The ombudsman found that the moratorium clause clearly applied because Mr S was aware of the lung abnormality during the five-year pre-policy period, it had been referred for review and placed under surveillance, and a formal diagnosis was not required for the clause to apply. The medical evidence consistently demonstrated the nodule's existence and evolution prior to policy commencement. However, the ombudsman acknowledged Vitality's service failures in managing expectations and communication, particularly in initially authorising cover before completing underwriting checks, which caused Mr S upset and inconvenience.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website