Pre-existing medical conditions

You have the right to decide what risks you’re prepared to cover – as long as the terms aren’t discriminatory. We view exclusions or warranties relating to pre-existing medical conditions as being fair and reasonable as long as the customer:

• is made aware of their existence
• understands what the relevant clauses or warranties mean

Customers must have a clear understanding of what is and isn’t included in their insurance cover. Any exclusion for a pre-existing medical condition should be set out clearly in the policy summary.

We’re likely to uphold a complaint where you didn’t bring these exclusions and warranties to your customer's attention when they took out the policy. It’s not enough to remind them that they need to read the policy and cancel it within the cooling-off period if it doesn’t meet their needs.

When we’re deciding whether a policy was mis-sold, we’ll usually ask you for evidence that you told the customer about the exclusion before they bought the policy.

If you sell the policy in an advised sale, you need to make sure that the policy is suitable for the customer’s needs. This may include:

• identifying whether they have any pre-existing medical conditions that are likely to be excluded from cover
• making them aware of the main restrictions and limitations in the policy

For policies where the customer needs to make their own checks about the suitability of the cover, the insurance is classed a non-advised sale. In this instance, you still need to:

• establish that the customer is eligible for the policy
• highlight exclusions relating to pre-existing medical conditions by giving the customer a policy summary

Eligibility may be an issue for certain insurance policies, like payment protection insurance (PPI), where the customer may not qualify for the insurance for reasons like:

• age
• absence from employment due to disability
• being unemployed or self-employed
• being on a short-term contract
• being aware of their imminent job loss

We’ll look at whether you were entitled to reject your customer’s claim. We’ll usually decide that it wouldn’t be fair for you to reject a claim on the basis of a pre-existing medical condition if the customer didn’t know that they (or their relative or pet, if relevant) had it.

In most cases where a customer is disputing the exclusion of a claim, a doctor's evidence will be enough for us to decide whether you’ve acted fairly.

Sometimes we may need more detailed evidence. This could be in cases where there’s no apparent link between the condition relating to the claim and the pre-existing medical condition. In these situations we may ask for:

• medical notes
• hospital records
• a medical consultant's report

The cost of getting medical evidence should usually be met by whichever side needs it for their case.

Sometimes a customer's medical records show that they (or their relative, or pet) had symptoms related to the medical condition that caused the claim before the start of the policy.

In these circumstances, no diagnosis may have been made at the time the customer took out the policy – so they may argue that they didn’t know they had the condition. This could be the case where the customer has symptoms that might be a sign of a serious condition or a minor one.

For example, a customer suffering from headaches is not necessarily ill – and may not consider themselves to have a condition that needs to be declared. But if the customer is then diagnosed with a brain tumour – which leads them to make an insurance claim – the headaches may be related to that condition.

A lot of insurers exclude pre-existing medical conditions that existed at the start of the policy but weren’t yet diagnosed. Even if this exclusion is in a policy, we usually take the view that claims shouldn’t be excluded if the customer only had minor, general symptoms at the start of the policy.

When we decide whether a condition was pre-existing within the meaning of a policy, we’ll consider:

• the intensity of the symptoms and how serious they were thought to be
• whether the customer was undergoing tests or had been referred to a consultant
• the customer’s diagnosis and treatment
• the connection between the pre-existing condition and the condition that gave rise to the claim
• whether the customer could reasonably be expected to have been aware that they might have to make a claim as a result of the symptoms

We see complaints where the insurer rejects a claim because a condition that the customer thought was dormant or fully resolved has returned. This could be in the case of something like a bad back or stress.

Insurers usually rely on the part of the exclusion for pre-existing medical conditions that relate to the customer's awareness. This means we’ll need to decide whether the customer believed that they were cured at the start of the policy.

If, at the start of their policy, a customer hadn’t had a recent consultation with their doctor or any medication or treatment for a couple of years – we usually take the view that the customer didn’t have a relevant pre-existing medical condition. The customer's medical notes are often helpful in showing this.

However, we take into account the nature and seriousness of the condition in each case. Just because a condition is under control – and the customer has learned to live with it – it doesn’t mean that we can discount it as a pre-existing medical condition.

Examples of conditions that are under control but may still be classed as a pre-existing medical condition include:

• a bad back that needs regular osteopathy and medication to manage the pain
• a customer who’s previously had a heart attack, and needs life-long medication to keep it under control

Most insurance policies specifically exclude claims arising from pregnancy – whether or not the customer knew she was pregnant when taking out the insurance.

Sometimes we see disputes where a customer decides not to have anti-malaria treatment after learning she is pregnant – and so doesn’t want to travel as planned. Claims aren’t usually covered in these circumstances.

Some policies also exclude claims if the customer travels after a certain period during the pregnancy.

Insurers usually meet claims that arise from the complications of pregnancy. This is because these aren’t usually anticipated or foreseen by the customer.

We’ll look at the facts when we decide whether a policy was mis-sold because a customer wasn’t made aware of an exclusion.

If there’s evidence that the customer would still have taken out the policy – we’ll say you don’t have to make a payment.

If the customer wouldn’t have bought the insurance if they’d known about the exclusion – we may ask you to refund the premium plus interest (calculated at 8% simple per year) less any tax due.

If there’s evidence that the customer would have got cover from another financial business if they’d known about the exclusion – we may ask you to treat the customer as if they’d had the alternative cover. This may mean giving them compensation that matches the settlement they would have been given.

The following factors may also indicate that the claim should be paid:

• you knew, or should reasonably have known, that the customer was ineligible for part or all of the policy because of their pre-existing medical condition
• the customer was led to believe that they would be covered for any eventuality
• the customer disclosed their pre-existing medical conditions but you continued with the sale and didn’t tell them what would happen if they needed to make a claim
• the customer became ill between the dates of buying the insurance and the cover actually starting

If you shouldn’t have used an exclusion for pre-existing medical conditions, we’ll usually tell you to pay the claim plus interest (calculated at 8% simple a year, less any tax due) from the date of the loss to the date of settlement.