Bank right to decline terminal illness claim

Insurance policies,
Pania was diagnosed with a serious medical condition, which was treated with surgery in October 2016. Her doctors told her the average life expectancy of patients with her condition was 14 months from treatment. Once that period had elapsed, in December 2017, Pania lodged a terminal illness claim through her life insurance policy with her bank. The bank declined the claim.
September 2019


Our investigation

Pania said the bank should have paid the claim based on the medical definition in the policy. The policy said terminal illness payments would be made if the life insured was conclusively diagnosed with an incurable illness that would, in the bank’s opinion, result in death within 12 months, regardless of any treatment undertaken. Based on the medical advice she had received for average life expectancy, Pania considered she had met this requirement.

The bank said based on the medical records, Pania’s condition was stable as at 2017 and she continued to respond well to treatment. It said the information did not indicate Pania had a life expectancy of less than 12 months, and it was therefore within the terms and conditions of the policy to decline the claim.

We reviewed the information and determined that it was unlikely we could uphold Pania’s complaint. The policy definition required a high probability of death within 12 months to qualify for the terminal illness payment.


Pania withdrew her complaint.

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