Sheila Hastings took out critical illness cover, but faced a fight over her £280,000 claim
When Sheila Hastings* heard just days after her daughter’s wedding that she had an “aggressive” form of kidney cancer and major surgery was inevitable, she was comforted that at least she had a “critical illness” insurance policy taken out with Zurich eight years earlier.
These policies are supposed to pay out a lump sum if you are diagnosed with a life-threatening illness such as cancer or heart disease. Typically, they cost about £100 a month for each £100,000 of cover if taken out by someone in their late 40s or early 50s. In Sheila Hastings’ case, her policy would pay out £279,224 on diagnosis.
But Hastings, 57, said she had to endure two years of “shocking, disgraceful and unacceptable” behaviour as Zurich, she says, attempted to “wriggle out of paying a genuine claim”.
She says she was forced to turn to lawyers and the Financial Ombudsman Service. The FOS ruled in her favour – but the ombudsman can only enforce payouts of up to £150,000. Hastings was given until 10 September to accept or reject it.
As a deadline approached to accept – and lose the legal right to pursue Zurich for the full amount – Hastings, in desperation, contacted Guardian Money. After we put her case, Zurich has agreed to pay in full.
Disputes over critical illness payouts are among the most delicate and distressing in the insurance industry – providers may choose whether to pay depending on their assessment of how serious they consider the cancer to be.
Hastings started feeling symptoms just as her daughter’s wedding abroad was approaching. She was sent for tests, “and I got the terrible results on my return. A tumour was detected on the CT scan in my right kidney. I was told that it was a high-grade cancer, and the only curative option was to have an operation (nephroureterectomy) to remove the kidney.”
After recovering from the operation she logged the claim. “This was declined due to wording in the policy. The point of taking out critical illness cover is so you don’t have to worry about finance if something like this should happen. Reducing my hours to cope with the ongoing tiredness has been a burden on my income, but Zurich doesn’t have to worry about that as they hide behind words and terminology.”
Zurich – currently running a billboard advertising campaign proclaiming that it pays on 99% of claims – told Money its policies have a defined list of conditions covered, but these must meet a specified degree of severity. “The policy definition is quite specific in excluding less-advanced cases – not all cancers will be covered. The medical opinion of those responsible for her care was that Mrs Hastings’ cancer was classified as a ‘non-invasive papillary carcinoma’. This was also confirmed by an oncologist medical officer. The claim was declined as it was non-invasive and did not meet the policy definition.”
But Hastings says her consultant was clear the cancer was, indeed, invasive, and took her case to the ombudsman. A provisional decision was made in her favour, which Zurich opposed. The final decision was, again, in her favour. The twist in the tale was the level of payout.
According to Hastings’ lawyer, Jan Trainor of BTW Solicitors, it left her in an impossible situation – accept the £150,000, or reject it and pursue Zurich through the courts for many more years to get the full £270,000.
The good news for Hastings is that when Guardian Money approached Zurich for comment on 7 September, within days it had a remarkable change of heart. It says: “We are surprised by the findings of the FOS, given the explicit contract wording and expert medical opinion … but we abide by its recommendation.”
But after her ordeal Hastings says: “I feel happy that I am getting what is owed, but I also feel very angry that we had to fight for something that should have been awarded at the start of my claim.”