The family of a man who died of cancer but whose life insurance payout was refused on the grounds that he failed to disclose pins and needles have won their fight against Friends Life, after the Financial Ombudsman Service (FOS) ruled that the insurer was wrong to cancel his policy.
Nic Hughes, 44, a graphic designer and lecturer, died last October from cancer of the gall bladder, leaving his wife Susannah Hancock and eight-year-old twins, the Guardian reports.
Before he died, he learned that Friends Life had cancelled his critical illness and life insurance policy, arguing that he had failed to disclose other symptoms which it said would have led it to refuse cover.
Hughes had declared that he suffered from ulcerative colitis when applying for the policy, but Friends Life said he had not admitted to suffering from pins and needles, or being asked to reduce his alcohol intake by his doctor - symptoms which his doctors said were unrelated to the cancer.
More than 63,000 people signed an online petition after his death urging the insurer to pay out following an energetic social media campaign supported by Stephen Fry and Miranda Hart, among others.
Hancock appealed to the FOS who has now ruled that the policy was wrongly cancelled, and Friends Life has agreed to pay the £100,000 claim in full, plus interest.
"While the firm remains of the view that Mr Hughes did not disclose some things at the time of the application," the ombudsman said in a letter to Hancock, "it accepts that any non-disclosure was not deliberate or relevant to the claim he later made - so the firm accepts it was not entitled to rely on that and it should have paid the critical illness claim when it was submitted."
In a statement Friends Life said: "We committed to abide by [FOS'] decision and, while we continue to have concerns about this case, we are sympathetic to the circumstances of Mr Hughes' family and believe it would be unfair to prolong the claim process any further.
"Therefore, rather than refer this case to a senior Ombudsman for review, we are making a payment to the family for the full value of the claim, plus interest. This is in addition to the ex-gratia payment already made.
"Friends Life follows the Association of British Insurers (ABI) Code on Non-disclosure and Treating Customers Fairly, and believes it is compliant with the new legislation which has recently come into force."
Available on SolutionBuilder portal
'Look beyond the bare statistics and ask why differentials exist'
Totalling £206 million
CI claims drop 14%