Not upheld: unfair claim decline and poor claims handling complaint against The Prudential Assurance Company Limited

Decision detail

Summary

Mr R claimed on his life assurance policy's terminal illness benefit after receiving a six-month life expectancy prognosis, but Prudential declined the claim. Mr R complained about both the claim decline and the poor handling of the claim process. The ombudsman found that the claim was not unfairly declined because Mr R's prognosis did not satisfy the policy's definition of terminal illness, which required death to be 'highly likely within 12 months and within the Term of the plan' when the policy was expiring in late November 2025. Although Prudential acknowledged that their claim handling and customer service fell short of required standards, the ombudsman upheld their £500 compensation offer as fair and reasonable for these process failures. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA rules requiring insurers to deal with claims promptly and fairly and not unreasonably decline them. The policy terms clearly defined terminal illness as requiring death to be 'highly likely within 12 months and within the Term of the plan'. Mr R's six-month prognosis with a policy expiring in late November 2025 did not satisfy this requirement, as it was not established that death was highly likely before the policy end date. While Prudential's claim handling process and customer service were deficient, this did not change the outcome of the claim itself. The £500 compensation offered was considered fair and reasonable for the process failures and distress caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website