The National Financial Ombud Scheme rules that the date of a life-changing event for Severe Illness Benefit claims is determined by the illness itself, not the paperwork, as seen in a recent dispute between a cancer patient and Discovery Life.
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The National Financial Ombud Scheme (NFO) has ruled that when it comes to Severe Illness Benefit claims, the illness itself – not the paperwork that confirms it – is the decisive event. This follows a dispute between a cancer patient and insurer Discovery Life.
The disagreement centred on Discovery Life’s refusal to pay out under the cancer benefit category. The insurer did not challenge the merits of the claim but argued that the claim arose on October 21 2023, when the complainant’s cover had already lapsed due to unpaid premiums.
In its defence, Discovery Life pointed to its policy wording, insisting that a “life-changing event” occurs only once there is objective medical confirmation, specifically histological verification. “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, however, questioned the reliance on October 21. A breast biopsy was performed on October 18, received on October 19, and reported as invasive breast carcinoma on October 21. Discovery Life argued that the life-changing event occurred only on the date of confirmation. The NFO disagreed.
Denise Gabriels, lead ombud of the Life Insurance Division, highlighted that the policy wording did not support Discovery’s interpretation.
“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 policy's qualifying criteria for the covered disease while 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 when the premiums were paid. These symptoms, together with the medical investigations, were consistent with and confirmed by the diagnosis of cancer in October 2023,” she said.
The NFO concluded that the complainant met the qualifying criteria while cover was active. Discovery Life was ordered to pay, and did, because the “life-changing event” was the cancer itself, not the paperwork that confirmed it.
PERSONAL FINANCE