My Twitter war to make insurers deliver on their illness promises

Prestige Chauffeurs Limited > News > My Twitter war to make insurers deliver on their illness promises

Originally Published in Daily Mail & This is Money | journalist Jeff Prestridge
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Chris Hargreaves should be an insurer’s dream. Over the years, despite painstakingly building a business as a chauffeur, he has paid regular premiums for private medical insurance and cover against possible long-term illness.

The premiums he has paid to some of the country’s strongest insurance brands add up to tens of thousands of pounds.

But Chris’s faith in insurance was undermined after he was hospitalised and could not work because of serious illness.

Scottish Provident failed to live up to its promise to protect his income in the event of illness and this almost bankrupted him.

Chris, 37, from Bury, is back at work, though still not fully recovered. And he is determined that what happened to him should not happen to others.

Encouraged by a ruling from the Financial Ombudsman Service that forced Scottish Provident to pay him compensation, Chris has waged a one-man campaign to force insurers to rewrite their income protection policies.

Adopting  the name ‘Angry Policyholder’, Chris has used Twitter  (@scotprovsaysno) to drum up  support and has attracted 11,000  followers. And he is getting results. In recent weeks Aviva has rewritten its new policies so other customers do not suffer the same fate as Chris, who is married to Nicola, also 37, a secretary in a GPs’ surgery.

Protection policies pay a monthly tax-free benefit if a policyholder is unable to work as a result of long-term illness. The money is paid – usually after an agreed deferred period of four weeks – until retirement, or the claimant is fit enough to go back to work.

Premiums are mainly dictated by occupation, with manual workers paying extra for cover. For most customers, the insurer will pay out if they are unable to pursue their own occupation as a result of illness. But for jobs where the insurer believes there is a high risk of a claim, there is a tougher approach.

A claim will be accepted only if a worker is unable to carry out at least two ‘activities of daily work’ such as walking unaided on a level surface without stopping and devoid of severe discomfort, or using a pen, pencil or keyboard with either hand. But they are often written so loosely by insurers that making a claim is almost impossible.

It is these activities of daily work that Chris wants to eradicate from income protection policies. He believes that all plans should relate to the policyholder’s own job, so that in his case he would have got benefit automatically because he was not able to drive.

‘I bought my Scottish Provident income protection policy in 2005,’ he says. ‘It was a condition of a small business loan I was taking out to expand my Prestige Chauffeurs business and I was happy to do it.’

But in July 2009, Chris suffered rectal bleeding and was admitted to hospital. For the next six months he spent most of his time in hospital being treated for a rectal ulcer as well as for a pulmonary embolism. Chris says: ‘I was on a drip a lot of the time, I had a number of blood transfusions and I suffered fits and seizures.’

Yet when Chris’s broker claimed on the Scottish Provident income protection policy in September 2009, stating he had problems walking and reading and writing, the insurer turned it down.

It said Chris was not incapable of carrying out two of the six work tasks described in its policy. Chris took his case to the Financial Ombudsman Service, which ruled in his favour earlier this year. He received £4,800, including compensation of £100.

But that wasn’t enough for Chris. ‘What is the point of income protection insurance if it doesn’t protect you?’ he asks.

Last week, a protection insurance industry task force said own-occupation should be the ‘definition of choice’ while Kevin Carr, of Kevin Carr Consulting, who gives protection insurance advice to the industry, says work task definitions are ‘unfair and too harsh’.

He says: ‘I’d rather have a better product that is available for fewer people written on an own-occupation basis than a poor product available to everyone but which lets down people like Chris Hargreaves.’

Insurers that write all income protection on an own-occupation basis include friendly societies British Friendly and Cirencester.

PruProtect also adopts such an approach, although for high-risk customers it reserves the right to halve benefits after a year.Roger Edwards, head of Scottish Provident’s protection insurance business, says the case of Chris Hargreaves has prompted the insurer to look at whether its work task definitions can be made more ‘consumer-friendly’.

£159,000 for slip on a sandwich

Not all purchasers of income protection insurance are let down. One person who is thankful he bought cover is the Reverend Paul Frostick from Bexhill, East Sussex.

His claim on an Aviva policy has just come to an end at age 60 – to coincide with the final payment on his mortgage – but he has received benefit over the past 13 years totalling £159,000.

‘I could not have done without it. It’s kept the wolf from the door,’ he says.
Paul was a teacher at Grove Secondary School in  St Leonards, East Sussex, when he suffered the accident that triggered a claim on his Aviva policy. ‘I was coming down the stairs to attend a staff meeting and I slipped on a sandwich that had been dropped,’ he says.

Paul, who is married to Eileen, 60, injured his spinal cord and has not worked as a teacher since. The injuries cause him to fall over all the time, which means he often has cuts to his forehead.

He takes services at Lindfield Church in West Sussex occasionally, although he suffers from memory loss. ‘I have to write down my sermons just in case I suffer from a memory lapse,’ he says.

Last year, Aviva paid out £29.6 million in income protection claims. More than 90 per cent of claims were paid. According to the insurer, 45 per cent of its income protection customers who have made a successful claim have received benefit for more than ten years.

Alan Lakey, income protection specialist at Highclere Financial Services in Hemel Hempstead, Hertfordshire, says the best income protection insurance is offered by friendly societies.

This is because all policies are written on an own-occupation basis and premiums are more affordable.

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