Insurer Friends Life has been forced to pay more than £100,000 to the family of a father who died from cancer while fighting the company for his insurance payout after the financial ombudsman said it was wrong to cancel his policy.
Nic Hughes was 44 when he died in October last year, leaving his wife Susannah Hancock and their eight-year-old twins.
It was less than a year after he had been diagnosed with gall bladder cancer and then secondary tumours on his liver.
Payout: Nic Hughes died aged 44 while still fighting with his insurance firm, Friends Life. The insurer has now agreed to pay the £100,000 claim, plus interest.
In January last year he tried to claim on the critical illness and life insurance policy he held jointly with his wife but Friends Life turned him down and cancelled his insurance.
The insurer claimed that when he applied for the policy in 2009 he had failed to inform them of symptoms that, if they had been declared, would have lead them to refuse his cover.
Nic has been suffering from a condition called ulcerative colitis (UC) for a number of years, but included this information in his application.
Unfortunately, during the process he didn’t state that he was suffering specifically from ‘loss of feeling or tingling of the limbs or face’ – a symptom of UC and something that he thought that Friends Life would be aware of.
More...
Quad bike accident left Holly with serious brain injuries but backpacker insurer refused to fly her home as small print meant she wasn't covered
'It actually wasn't the cancer that worried me, it was the money': Illness 'costs' patients £570 a month...but you can get cash help
Can you find a better deal on your health insurance?
He also incorrectly failed to state that he had never been asked to reduce his alcohol intake for medical reasons. Nic denied that his liver function had ever been abnormal. In fact, he had no problem with his liver until cancer was diagnosed in 2011. His doctor also confirmed that this would not have been linked to his illness.
After his death, more than 63,000 people signed an online petition on the Change.org website urging the insurer to pay out – it was supported by celebrities such as Miranda Hart and Stephen Fry on Twitter and a Facebook group attracted over 2,700 members.
Denied: Nic, pictured here with a friend, believed he had fully disclosed all the information he could to Friends Life.
His wife, Susannah, appealed to the Financial Ombudsman Service over the rejection of the claim. It finally delivered its verdict this week and wrote to Nic's family to say that Friends Life had incorrectly rejected the claim and should not have cancelled the policy.
The insurer has now agreed to pay the £100,000, plus interest.
A family friend, Kester Brewin, who started the petition on the Change.org website, said: ‘The family are over-joyed. Yet while the Ombudsman has decided totally in their favour there is a sense of sadness that it took so much to force a company to do what was patently the right thing.
'We hope that this case gives the whole insurance and financial industry pause for thought; in an age of social media and online campaigning it is madness to think that you can brush legitimate complaints away and refuse to engage, no matter how big you are.’
Help: The petition on the Change.org website gained support from celebrities, like Stephen Fry, on Twitter.
A spokesman from Friends Life said: ‘We have now been informed of the Financial Ombudsman Service’s (FOS) initial decision. We committed to abide by the FOS’s decision and, while we continue to have concerns about this case, we are sympathetic to the circumstances of Mr Hughes’ family and believe it would be unfair to prolong the claim process any further.
'Therefore, rather than refer this case to a senior Ombudsman for review, we are making a payment to the family for the full value of the claim, plus interest. This is in addition to the ex-gratia payment already made.’
A new rule for insurers, under the Consumer Insurance Act, which came into force earlier this year means that firms must ask specific questions about details which they might use to reject a claim.
Friends Life said they believed they had complied the new legislation and the Association of British Insurers (ABI) Code on Non-disclosure and Treating Customers Fairly.