Life and Critical Illness insurance is there to financially protect yourself or your loved if you are diagnosed with a life-threatening illness or die.
By having these policies in place, yourself or your beneficiaries will receive a payout to help with costs such as funeral plans or to pay off a mortgage in a crucial time of need.
However, although these insurance policies act as a piece of mind for when things unexpectedly go wrong, sometimes insurance companies can wrongly refuse to pay out, leaving yourself or your loved ones with nothing. This is known as a breach of insurance.
As well as protecting policyholders, insurance companies are there to make money for themselves, so will often look for ways to avoid a payout.
Sometimes they use tactics which can seem convincing to their non-lawyer customers, such as quoting technicalities of the contract, but they are not always correct.
If you have tried to claim on a life insurance or critical illness policy and have been refused due to reasons you deem invalid or unfair, you may be entitled to make a claim against the insurer.
We have rounded-up everything you need to know about breach of insurance and life insurance policies, and how to make a claim with a knowledgeable Solicitor.
Insurance companies are there to protect policy holders when things go wrong.
But insurance companies are also there to make money, so they will often try to find a way out of making a payout to their policyholders.
In some cases, insurance companies will use tactics to convince their non-lawyer customers that they are not entitled to a payout by quoting the technicalities of the contract. But, although this can sound convincing, sometimes it is wrong, and a breach of the insurers contract.
However, protections are in place for insurance holders to ensure they get the payout they deserve if they have a valid insurance policy, and with the help of a knowledgeable solicitor, claims can be made against your insurance company if you believe you should be entitled to a payout.
Life Insurance and Critical Illness Insurance appear like they serve a similar purpose, but they are in fact very different.
Life insurance cover is a provision to protect your loved ones financially if you die within the policy term. When you take it out, you will need to name the beneficiaries who will receive the payout when you pass away.
In comparison, Critical Illness cover is about helping you live life after being diagnosed with a serious illness. If the health condition you have been diagnosed with is covered in your policy, the insurance company will provide you with a lump sum to help with your finances.
However, sometimes things can go wrong, and although you might have paid your insurance premiums and adhered to the policy provisions, in some cases, insurance companies wrongly refuse to pay out, and this is known as a ‘breach of insurance’.
An example of a breach of insurance could be that you have paid your premiums for Critical Illness cover, adhered to all the policy provisions and kept your insurer up to date with any changes as specified in the contract. But, after a year, you have been told you need to undergo a major organ transplant due to a health condition.
Major Organ Transplants are covered on your insurance policy, but when you go to claim, your insurer refuses to pay out after stating they do not cover this type of procedure. In this scenario, you may be entitled to make a claim.
A breach of an insurance contract occurs when one party fails to fulfil its contractual obligations as outlined in the insurance policy.
Insurance contracts are legal agreements that specify the terms, conditions, and obligations of both parties. If your insurer fails to meet these obligations, it may be considered a breach of the insurance contract, and you may be able to make a claim.
Although in some cases insurance companies wrongly breach their contract, you need adhere to the policy provisions to ensure it is valid.
We have rounded up seven reasons why your insurance company may legitimately refuse to pay out:
For example, saying you don’t smoke, or you have no existing medical conditions during your insurance application could void the policy when you die.
Your insurer may refuse to pay out if the policy has lapsed due to non-payment. Make sure you set up automatic payments and ensure the payment method is up to date to avoid missing any.
Depending on your policy provisions, the insurance may not cover some causes of death. This may include deaths caused by high-risk activities, or if you died whilst carrying out criminal activities.
If you take out a life insurance policy but only name one beneficiary, and they die before you, it can be a long and complex process for someone else to claim the insurance benefits.
To avoid this, you should name a secondary beneficiary, and even a third if you see fit.
Some policies will have a waiting period after you take out the insurance where you won’t be covered.
For example, for the first 12 months, you may not be covered for some causes of death, and if you die during this time, your beneficiary may not receive a pay out
Depending on what type of life insurance you take out, some policies may not cover suicides. Meanwhile, some may cover suicide but after a set number of months, depending on the policy provisions.
Some life insurance policies may only remain in place for a set period (a term). If the policyholder does not pass away during the term of the policy and they do not take out another life insurance with another provider, their death will not result in a payout.
There are different types of life insurance policies which will benefit give you different types of cover, to benefit you depending on your personal circumstances.
Each contract will specify different provisions, but if your insurer has broken these provisions, it may be a breach of contract.
Whole-of-life insurance is a type of life insurance policy that ensures no matter when you die, your loved ones will receive a lump sum payout from your insurer. This is in contrast to term life insurance, which only guarantees that there will be a payout should you die within the specified term of the policy
Critical illness cover is there to pay out a lump sum if you’re diagnosed with one of the ‘critical illnesses’ it covers. Most will typically cover life-threatening conditions such as a heart attack, stroke and cancer. Many Critical Illness insurance plans are included as part of a life insurance policy.
An over-50’s life insurance plan is a type of guaranteed life insurance that can be taken out if you’re aged between 50 and 80.
It is a type of policy that is designed for those over the age of 50, as it requires no medical checks, for easy cover that lasts the rest of your life – as long as you’ve paid your monthly premiums when they are due.
If you are over 50 years old, you can also opt for a regular type of life insurance policy, rather than a over 50s plan, to suit your needs.
Term insurance gives you life cover over a pre-agreed period of time. If you die during this period, your policy pays out a lump sum. This type of cover is useful for providing financial security for your dependents.
Group life cover is a type of life insurance that covers a group of people, usually employees of the same company. The employer owns the policy and pays the premiums.
The cover is typically a term insurance, which means it only pays out if the employee dies while working for the employer. The benefit is paid to the employee’s beneficiaries, such as family members, to provide financial support
Frequently Asked Questions
How much does life insurance cost?
Life Insurance premiums vary depending on multiple factors such as your age, health, occupation and smoking status. To find the best life insurance for you, use an online comparison website such as MoneySuperMarket.com.
How do I make a claim?
If you believe that an insurance company has breached its obligations under your insurance policy, you will need to take certain steps to make a breach of insurance claim.
Here is a general guide on what you can do:
1) Review your policy:
Carefully review your insurance policy to understand the terms, conditions, and coverage details. This will help you determine whether the insurer has indeed breached the contract.
2) Document the breach:
Collect evidence that supports your claim of breach. This may include letters, emails, policy documents, claim denials, or any other relevant communication.
Document specific instances where you believe the insurer has failed to fulfil its obligations.
3) Contact your insurance company:
Initiate contact with your insurance company to discuss your concerns. Explain why you believe there has been a breach of contract and provide the supporting documentation.
It’s important to keep a record of all communications, including dates, times, and names of the individuals you speak with.
4) Request a Written Explanation:
If the insurer’s response is not satisfactory, consider requesting a written explanation for their actions or decisions. This documentation can be useful if you need to escalate the matter.
5) Follow Internal Complaint Procedures:
Many insurance companies have internal procedures for handling customer complaints.
Follow these procedures, which may involve submitting a formal complaint in writing to a specific department or individual within the insurance company.
6) Seek Legal Advice:
If your efforts to resolve the issue directly with the insurance company are unsuccessful, consider seeking legal advice.
A legal expert with expertise in insurance law can assess the situation, provide guidance on your rights, and help you determine the best course of action.
Why should I choose Oakwood Solicitors Ltd?
From the start of your claim until the conclusion you will have a dedicated advisor who will run your claim, assisting you in the event of any queries or issues you may have.
Regular updates will be provided by your case handler up until your claim has ended. This is to ensure the process is as stress-free and effortless as possible.
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