/ Money

Sir, you’ll have to lose another leg for a payout

Ginger bread with missing leg

You’d think your critical illness insurance would cover you if you lost a limb. Little would you know that you’ll need to lose two limbs for a payout. Bus driver Martin Wells faced this very situation…

Over the course of 12 years, Martin Wells paid around £30 a month, or more than £4,500, on critical illness cover with Scottish Widows.

When he had his leg amputated due to infections following a motorcycle accident, he had expected a payout. Instead, he was told that he would need to lose both legs before his insurer would pay.

In Martin Well’s own words, ‘It’s ridiculous. People take these policies out in good faith.’

Where’s the common sense?

Scottish Widows’ policy covers ‘loss of hands or feet – permanent physical severance of any combination of two or more hands or feet at or above the wrist or ankle joints’.

This does seem a little mad – when you take out critical illness cover you’d expect to get a payout if you lost a leg. At no point would it ever come to mind that you’d have to lose another. Surely losing just one is “critical” enough?

Common sense is completely lacking. And when you read the latter part of the policy’s terms, it appears that if you lost both your feet below the ankle joints you also wouldn’t get a payout.

However, Scottish Widows has pointed out that the company was following standard practice. A spokesman commented:

‘Under the Association of British Insurers loss of limb definition, adhered to by Scottish Widows, a critical illness policy only pays out when two limbs are lost.’

It seems that if you want to cover yourself for the loss of just one limb you’ll have to take out enhanced cover. However, if the exceptions of your original policy aren’t made clear when you sign up, how are you to know that enhanced cover is necessary? Plus, who would think to ask such a question before they signed on the dotted line?

Read the T&Cs

Our insurance expert Dan Moore comments:

‘This story highlights the problem with critical illness cover – it is not a catch-all solution. The policy would state the loss of more than one limb, but whether this was clearly explained to the customer when he was looking to take out the policy is another matter.’

Dan has previously written about insurers cancelling cover after someone has been diagnosed with cancer. Martin Wells’ case looks like another example of where insurers aren’t playing fair – or are at least being counter to common sense.

So, my advice to you is; carefully read through your policy’s terms and conditions before you find yourself up the creek without a paddle – or an arm to use it.


For many years I have believed that we need insurance to cover things that the average person would assume they are covered for.

Few of us have the time to read all the terms and conditions we encounter but everyone really needs to study insurance cover or risk facing a nasty surprise. Nowadays, insurance companies provide detailed, clear information about what is covered. Private health insurance is full of surprises, and the cover can change, for better or worse, from year to year.

Em says:
29 July 2011

I have every sympathy for Mr Wells’ situation, but it is fundamental to any contract of insurance that the insurer will limit the circumstances where a claim has to be settled and manipulate the risks in their favour to make more profit.

In essence, insurance is no different from placing a bet with a bookmaker. Are you prepared to bet you will crash your car this year? Your employer will make you redundant? You will die before you’ve paid off your mortgage?

The difference is that you are speculating about events that may befall you, rather than some external event. And this is where the concept of “good faith” applies. You know far more about your personal circumstances than the insurer; so there is a duty on you to disclose all material facts and not mislead.

Given this disclosure takes place, the odds of particular events actually happening are well know to the bookmaker (known in the trade as an “underwriter” or “actuary”), less well so to the punter (sorry, “the Insured”). And by devising products with a combination of risks, insurers make it harder for the public to assess the value for money of their offerings. Critical Health Insurance is the ultimate in this regard, so let’s consider a simpler example; travel insurance.

You are probably willing to bet £20 or more that, over the course of the next 10 days, you and your family will have your flights cancelled, your luggage will be stolen and you will fall ill or have an accident requiring hospitalization. (If even one of those events was actually likely to happen who, in their right mind, would ever go on holiday?)

Insurers sell their products on price – hence the popularity of the comparison websites – but you need the eyes of a hawk to spot the limitations and exclusions that improve the odds for the insurer. Or can you just assume that because you’ve paid more than £20 you must be covered for any and every contingency and circumstance that could ever befall you on holiday? Of course not, so does this make travel insurance unfair?

Consumers need to understand the true nature of insurance, and use the same care and attention to detail that they would apply when betting on a white Christmas. “I’ve won! It’s snowing.” “Yeah mate, but not in Cairo!”


Good points Em. I like the comparison with gambling.

Obviously the insured has the responsibility of checking their insurance cover, and my limited experience suggests the insurance industry is doing a good job in providing clear information.

Ideally, Martin Wells should have been the option of choosing cover for loss of one limb or two, and the cost difference. Websites are ideal for presenting us with a wide range of options that we can consider with care and with regard to costs.

Until the customer can specify exactly what cover they want it is difficult to establish which company offers the best value for money.


The Insurance Industry’s functioning has become corrupted as it is directed by biased accountants protecting their own interest through call centres . This is with the Government & Regulators employing the same administrative structure the call centre with each one copying the other with undemocratic rip off procedures.If one raises issues they set you up as a vexatious litigant by their dubious complaints procedures They are using the unqualified on remits to make medical, legal decisions on corporate remits via GPs. The GPs who are also directed by the corporate in LAs/ PCT via contracts. I had 3 policies with a company that sponsors a certain TV programme but refused to let me claim though deliberately used information to market . So I could not get a second opinion initially which contributed to cardiac arrest . They then abandoned taking monthly payments with Financial Ombudsman allowing them to take the payments for a year never reimbursing or investigating fairly even though had a legal expert witness .This has happened over 10 times with Ombudsman often taking side of underwriters or those that pay them.

Mark Smith says:
29 February 2012

In my experience I find the life insurance policies and critical policies are delibrately designed to take payment and no pay out when your in a position to make a claim. Surgical precedures are being changed with modern technology and the policies are written do no reflect that change. Heart Attack is a Heart Attack but in the wording or definitions the insurance company baffles you with science. You usually find one part of the policy will take you to one page then another page then if this does not equal to that go to that page. In other words designed to annoy you then give you a full explanation of your entitlement. I believe all insurance policies are being missold. Good thing now is consumers can do their own research via the internet.

I remember that song ” Money For Nothing ” Dire Straits

Ryan Tymon says:
10 April 2012

Im a trainee financial advisor and see this day to day. If anyone wants to take out either Life cover or Critical illness then speak to an advisor. There are so many different Providers out there such as Scottish Widows or FriendsLife, In my opinion the best Critical Illness provider out there at the moment is PruProtect, They provide up to 161 ABI Definitions. You will not usually pay for this advice as it is commision based and for advisors like myself it gives me the oppurtunity to assess other financial aspects such as pensions or mortgages.


can anyone help me, I took an critical illness cover when i took my morgage out as i was a single parent and as my advisor told me there was only one income coming in. 5 years ago I was diagnosed with breast cancer (DCIS) consequently had a full mastetomy and radiotherpy in the small print of the policy its say does not pay out insitu, I feel I was missold has I was covering all inventualities I am still paying the £15.51for the remaining of the policy and legal and general who the cover is with ,will not give me life insurance, cant win.


Hi Ann. Sorry to hear about your experiences. I’ve checked the L&G policy wording and you’re right that it does exclude DCIS. However, I’m not convinced that the average person would know when taking out the policy what that actually means (I had to Google it), so someone should have explained it at the time.

I’d suggest that you complain to whoever advised you and sold you the policy, explaining that the exclusions weren’t explained at the time and that you’ve subsequently lost out financially. If you don’t get a satisfactory answer, you could complain to the Financial Ombudsman Service (FOS). Details are in this guide: http://www.which.co.uk/consumer-rights/action/when-to-take-a-complaint-to-the-ombudsman/?a=how-to-complain-to-an-ombudsman

The problem you may face though is whether you’re within the time limits to go to the FOS. Usually you need to lodge a complaint either within 6 years of the policy being taken out or, if later, within 3 years of becoming aware of the problem. It’s not clear from your message whether you’re within the 6 year limit, but it’s still worth complaining to whoever sold you the policy.

We think insurers’ terms and conditions should be very clear about what is and isn’t covered under a policy, including the use of clear and unambiguous language – we’ll continue to work towards this by exposing bad practice and engaging with companies and regulators. Do let us know how you get on.