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.
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