CR90

Non-payment on funeral plan – non-disclosure of material facts

Background

The complainant is the son of the deceased insured. The deceased had concluded a funeral plan with the insurer during September 2003 following a telephonic application to the insurer. One of the questions posed by the insurer was whether the deceased insured was in good health to which she had replied in the affirmative.

It transpired that the deceased insured had been treated for breast cancer from November 2000 to July 2001 during which time she had had a mastectomy followed by chemotherapy. In October 2002 and again in October 2003 further cancer had been detected. She subsequently died in April 2004.

Discussion

Undoubtedly the deceased insured was aware of her cancer in September 2003 when she applied for the funeral plan. The crux of the problem seemed to lie in the telephonic question by the insurer to the deceased insured as to whether she was in good health. It was argued on the one hand by the insurer that the deceased insured’s medical condition was not disclosed at the time of the inception of the policy and that this amounted to non-disclosure of a material fact. On the other hand it was argued by the complainant that the telephonic question was very general and not qualified. The insured deceased could from her point of view merely have considered the question as an enquiry to her sense of well being at that particular moment and she could have anticipated that further questions concerning her health would have followed. This did not occur. In fact there were no further questions relating to her medical background.

In the circumstances we recommended, notwithstanding a forfeiture clause, that the premiums that had been paid by the deceased insured be refunded in full.

Result

The insurer accepted our recommendation and although the complainant was not entirely satisfied, he accepted the ruling.

AS
October 2005