CR89 Funeral Policy – change of rules – waiting period.


Funeral Policy – change of rules – waiting period.


The complainant joined the F Funeral Plan in 2002. He was the policyholder and premium payer and his spouse was the life assured. The Plan was underwritten by insurer X. The “Certificate of Acceptance” issued to him provided, inter alia, for a six months waiting period from date of acceptance and that “monthly premiums must be paid every month in which they are due. Premiums can be paid in advance. If premiums are in arrears no claim will be considered. Arrear premiums can be paid to reinstate your policy.” The certificate also provided, “Conditions, premiums and benefits are subject to review from time to time.” The complainant chose to pay at the end of the month and was on occasion late but such late payments were always made up in the month following.

In June 2004 the Plan switched to a new underwriter Y. Y brought about a change in rules. All policyholders were notified by ordinary post that a waiting period of three months would henceforth apply if payments fell more than thirty days in arrears. It was also stated in the new rules that policyholders may elect to cancel the policy and give Y three months notification of such intention.

When the complainant made a claim in November 2004 it was declined on the basis of the new waiting period since the complainant was more than one month in arrears with his payment at the time. The complainant denied that he received any notification of a change to the rules.

The insurer was adamant that it would not pay. The complainant complained to us. We pointed out that the provision relating to “a review” in the original rules did not permit a unilateral amendment to the terms of the policy. The insurer sought to justify the imposition of a new waiting period on the basis “this should not be viewed as a unilateral amendment, as the changes were effected to protect the interests of the scheme”. Needless to say this justification could not be accepted. We said, “As I read the provision it would, at best for the insurer, entitle it to give the policyholder the option of either accepting the new proposed term or terminating his agreement without any penalty. That option was clearly not given to the policyholder and can therefore be ignored.”

And again:

“In the absence of proof that the policyholder was aware of and agreed to the change of the rules it does seem to me that the old rules applied and consequently that it was not open to you to rely on the provisions of the new rules and in particular on the clause relating to the new waiting period.”


In the absence of proof that the notification reached the policyholder the insurer accepted our ruling that the claim had to be met. The complainant wrote to us: “I want to thank your department for the assistance which they gave me and I appreciate all the hard work that you have done for me.”

October 2005