The occurrence of an illness itself is the defining event when considering a Severe Illness Benefit claim – not the later administrative act of diagnosis, the National Financial Ombud Scheme (NFO) has ruled in a matter involving insurer Discovery Life and a cancer patient.
The dispute concerned Discovery Life’s decision to decline the complainant’s claim to the Severe Illness Benefit under the cancer benefit category. Discovery did not dispute the validity of the claim on its merits but instead relied on a technical defence, namely that the claim arose on 21 October 2023 when cover had lapsed due to unpaid premiums.
In response to an earlier provisional ruling by the NFO, Discovery Life said its policy terms unambiguously stipulate that a “life-changing event” occurs only upon objective medical confirmation and specifically, histological verification of a covered condition. “The mere presence of symptoms, even if clinically suggestive, does not suffice to meet the contractual threshold for a valid claim under the Severe Illness Benefit,” the insurer said.
The ombud questioned the 21 October 2023 date. A breast biopsy was performed on 18 October 2023, received on 19 October 2023, and reported as invasive breast carcinoma on 21 October 2023. Therefore, according to Discovery, the life-changing event occurred on 21 October 2023. The NFO disagreed.
Denise Gabriels, Lead Ombud of the Life Insurance Division of the NFO, pointed out to the insurer that the policy did not support the proposition that the claim event is only deemed to occur on confirmation of diagnosis.
“Discovery Life has yet to point to the provision in the policy which stipulates that a life-changing event is deemed to have occurred on the date medical confirmation of a covered condition has been received.
“In the absence of a deeming provision, the date of the life-changing event is the actual date of occurrence. If the evidence proves that the insured met the qualifying criteria of the disease covered by the policy when the policy was in force, the insurer is liable.
“The fact that the proof – medical confirmation and histological verification – was received when the policy was out of force does not exclude a valid claim which arose when the policy was in force.
The evidence showed that the complainant had experienced symptoms in September 2023. These symptoms together with the medical investigations, were consistent with and confirmed by the diagnosis of cancer in October 2023,” she said.
The NFO was satisfied that the evidence proved that the complainant met the qualifying criteria of the disease when the cover was in place. Discovery was ordered to pay the claim – and did – because the “life-changing event” was the cancer itself, not the paperwork that confirmed it.
