Not upheld: Home insurance claim disputes complaint against Scottish Widows Limited

Decision detail

Summary

Mr M1 held a 22-year term assurance policy with Scottish Widows since 2011. When he became unable to work due to a heart condition in December 2024, he claimed the policy should compensate him for lost earnings. Scottish Widows accepted the claim, waived his premiums under the premium protection benefit, and paid a £150 goodwill gesture, but declined to pay further benefits as the policy does not provide income protection. The ombudsman upheld Scottish Widows' decision, finding the policy correctly applied and that life cover only activates upon death or terminal illness, not illness alone. The ombudsman noted that a separate mis-sale complaint could be raised if desired.

The Ombudsman's reasoning

The ombudsman found that Scottish Widows correctly applied the policy terms. The policy provides premium protection (waiving premiums when unable to work in a suited occupation due to illness) but does not provide income protection or cover for lost earnings. Life cover only activates upon death or terminal illness diagnosis, neither of which had occurred. The £150 goodwill payment was fair and reasonable. The ombudsman noted that a separate mis-sale complaint could be raised if the trustees wished to challenge how the policy was sold, but that is not the complaint being considered here.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website