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Determination
Case number | 1048444 |
Financial firm | TAL Life Limited |
Case number: 1048444 26 June 2024
The complainant had a critical illness insurance policy with the insurer. Cover began on 17 July 2023.
On 5 October, the complainant was diagnosed with breast cancer in her right breast. On 13 October 2023, she was diagnosed with a separate cancer in her left breast.
She made a claim on the policy. The insurer rejected the claim. It says the policy has a qualifying period of 3 months for cancer, and both cancers were diagnosed within that qualifying period. It says the complainant has not met the criteria for the qualifying period to be waived.
No. The complainant’s cancers were diagnosed inside the qualifying period in the policy. The complainant has not established that she is entitled to a waiver of the qualifying period.
Fairness requires the reasonable expectations of the parties to be met. The complainant cannot reasonably expect to be paid a benefit when she is not entitled to one under the terms of the policy. The policy has terms about when the qualifying period will be waived. Those terms are fair. The complainant has not established that she is entitled to a waiver of the qualifying period under the terms of the policy.
I note that the complainant did not say she had previous cover when applying for the policy. There is no allegation that the insurer did or said anything during the sale process which might have suggested that it would waive the qualifying period.
I appreciate that the cancers were diagnosed very close to the end of the qualifying period. That does not make the application of the qualifying period unfair. The qualifying period is fairly short. The qualifying period itself is not unfair: all insurance policies have terms which draw a line between claims that will be paid, and those that will be rejected. The application of those terms is not inherently unfair.
This determination is in favour of the insurer. The insurer is not required to pay the claim or to take any other action.
No. The complainant’s cancers were diagnosed inside the qualifying period in the policy. The complainant has not established that she is entitled to a waiver of the qualifying period.
The policy says:
Qualifying period
No payment will be made if a claim arises directly or indirectly because of any one of the Critical Illness Events listed in the table below if the condition occurred or was diagnosed, or the signs or symptoms leading to the diagnosis became apparent to the Life Insured or would have become apparent to a reasonable person in the position of the Life Insured:
• within three months after the Plan start date;
The policy lists ‘Cancer (of specified criteria)’ in the table of conditions for which the three month qualifying period applies.
The policy says when this qualifying period will be waived:
We will waive this three-month period if:
• you were insured with us or another insurer for the same events immediately before your cover starts;
and
• you transferred your cover after any similar three month period.
The waiver will only apply up to the level of critical illness cover that you had with us or the other insurer. Should you reinstate your cover, the three month period will recommence from the date of reinstatement.
Cover began on 17 July 2023. The qualifying period ran for three months, until 17 October 2023.
There is no dispute that both cancers were diagnosed within the qualifying period. Unless the qualifying period is waived, the insurer is not required to pay a benefit under the terms of the policy.
The complainant says that she had cover for cancer before the policy commenced, through insurance arrangements provided by her husband’s employer.
The complainant has provided some documents to support this claim. The documents include:
A letter from her husband’s employer dated 14 March 2024 which says:
We confirm that our employee… along with his wife…, and daughter were all covered under our life, accident, critical illness and medical insurance, during his international assignment from August 2020 to June 2023.
A document headed ‘Life, Accident, and Critical Illness (CI) Insurance Types’, which says”
> ‘Core’ insurance is provided automatically to all employees
> ‘Additional insurance coverage’ which is ‘available’ to spouses
‒ The additional insurance included critical illness cover up to $200,000
A document headed ‘Life, Accident, and Critical Illness Insurance – Policy Overview, which says:
> cover for the complainant’s husband was provided automatically
> he could then ‘add [his] choice of’ further insurance, including critical illness insurance for the complainant, ‘up to $200,000’.
> critical illness cover included cover for cancer,
It seems clear that critical illness cover was available to the complainant through her husband’s employer. I am not satisfied, based on the information before me, that the complainant had critical illness cover for cancer immediately before the current policy began. There is no information before me about how much critical illness cover the complainant had, if any, through her husband’s employer’s insurance arrangements.
Further, it seems that any cover she did have ended about a month before the current policy began. I am not satisfied there was ‘continuity of cover’ as the complainant suggests.
The complainant also refers to the fact that she previously had critical illness cover, with a different insurer. That policy ended in 2020, at around the time the complainant and her husband moved overseas for his job. It is not relevant to the waiver of the waiting period in the current policy.
In these circumstances, I am not satisfied that the complainant is entitled to a waiver of the qualifying period. It follows that I do not consider that the insurer is required to pay the claim.
Fairness requires the reasonable expectations of the parties to be met. The complainant cannot reasonably expect to be paid a benefit when she is not entitled to one under the terms of the policy. The policy has terms about when the qualifying period will be waived. Those terms are fair. The complainant has not established that she is entitled to a waiver of the qualifying period under the terms of the policy.
I note that the complainant did not say she had previous cover when applying for the policy. There is no allegation that the insurer did or said anything during the sale process which might have suggested that it would waive the qualifying period, or treat her as having continuity of cover.
I appreciate that the cancers – especially the second one - were diagnosed very close to the end of the qualifying period. That does not make the application of the qualifying period unfair. The qualifying period is fairly short. The qualifying period itself is not unfair: all insurance policies have terms which draw a line between claims that will be paid, and those that will be rejected. The application of those terms is not inherently unfair.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
the legal principles
applicable industry codes or guidance
good industry practice
previous decisions of AFCA or its predecessor schemes (which are not binding).
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all of the information the parties have provided.
While the parties have raised a number of issues in their submissions, I have restricted this determination to the issues that are relevant to the outcome.
