L&G nonetheless will not pay us £132,000 months after my husband’s terminal prognosis: SALLY SORTS IT

In February 2025, at the age of just 40, my husband was diagnosed with a rare lung disorder called obliterans bronchiolitis, along with an unclassified systemic autoimmune disease. 

Since then, he has been on a rollercoaster ride with his health, and he is on permanent oxygen with a lung function of 22 per cent.

We have a £112,000 life insurance policy and a £20,000 critical illness policy with Legal & General. 

In June last year, we put in a claim on the critical illness plan under respiratory failure, but eight months on I am yet to get paid.

More recently, we also made a claim on the life policy for terminal illness, which pays out if one of us is deemed by doctors to have less than 12 months to live. 

Doctors agreed this is the case with my husband but the claim was refused because he is awaiting a lung transplant. Please help.

L.N., South Yorkshire.

Sally Hamilton replies: IT’S hard to comprehend the trauma you and your family are going through. 

The emotional circumstances surrounding your husband’s declining health are challenging enough, never mind the financial fall out.

You work in palliative care and have taken time off on half pay to care for your husband and two children. 

However, you say financial pressures mean you will need to return to work if the insurance claims aren’t successful. 

The life insurance policy is designed to cover your mortgage and is worth £112,000 (its value decreases over time in line with your outstanding). 

The critical illness policy pays out a tax-free lump sum if one of you is diagnosed with a specific, serious condition.

Your financial worries would have pushed you over the brink already had it not been for assistance from your parents.

You sent mountains of paperwork to L&G, including an SR1 form from doctors treating your husband. This declares a person has less than 12 months to live and is used to help with terminal illness insurance claims.

L&G initially rejected the critical illness claim in August last year because your husband was apparently not sick enough. In October, when you told the insurer his condition had deteriorated, it reopened the claim.

While it agreed to revisit the critical illness claim, L&G said it could not consider the terminal illness request on the life policy.

It said your husband’s life could be extended beyond 12 months, because he had been recommended for a lung transplant by medics. When you contacted me in January, you were in despair as you were told the waiting list for the transplant was 18 months.

I first stepped in on January 13, asking L&G to explain why the critical illness claim was taking so long to be assessed. The insurer spent three weeks investigating.

I am pleased to say this claim was finally agreed and the £20,000 payment arranged in early February. A spokesman for L&G described your case as ‘complex’.

She said in February: ‘We understand how difficult this situation is for the customer and their family, and we’re sorry for the time it has taken to fully consider their claim. Unfortunately, there have been delays in obtaining all the medical information required.

‘Outstanding information from the GP was provided this week, although a further conversation was needed to clarify the customer’s medical history at the time the policy was taken out.’

While the insurer apologised for the delays, it refused any compensation, as it said the required timescales were met.

Your husband took out the policies in 2017. Had he done so about a decade earlier the hurdles to jump may have been fewer, as the terms and conditions of older policies are often more generous.

Alan Lakey, of CIExpert, a protection insurance comparison service, says L&G’s current definition for respiratory failure was introduced in 2007, and is harsher than the one it applied previously. 

Now claimants must require permanent oxygen therapy and have a lung capacity of less than 50 per cent.

He says: ‘A claim that might have been agreed readily from the previous definition might be declined thereafter.’

When I contacted you for reaction to the £20,000 payment, you told me the incredible news that just six days after your husband was put on the transplant list in late January a donor was found and he underwent the operation.

There’s a long road ahead, but he is recovering and recently returned home. Although the terminal illness claim is off the table because of the transplant, you say your husband receiving new lungs and a better quality of life is far more important than money.

It can often be a torturous endeavour to get an ill-health claim paid. L&G’s stance seemed harsh and its actions slow, considering your husband’s condition. 

Insurers aren’t charities, so they can be hard-nosed when applying policy conditions and painstaking in checking medical records from before and after a policy is taken out before parting with any cash.

You were grateful for my support and said: ‘I hope that nobody ever has to go through the stress we went through claiming for something that we were entitled to all along’. I wish you and your family all the best.

Why I fear your consumer protection is being eroded

The Financial Ombudsman Service is not perfect but, as a consumer champion, I am a big fan. 

It can be slow, but if you’ve been treated unfairly by financial firms, it gives you a free and impartial route to redress without going to the courts.

So I worry that changes the Government revealed on Monday will water down consumer protection.

At present, the Ombudsman doesn’t work to a formula – each case is treated on its merits. Under the proposals, this nuance will go. 

Firms will be deemed to have acted fairly if they have merely complied with rules laid out by the Financial Conduct Authority.

Even more concerning is a ten-year limit for complaints. Currently, you can go to the service within three years of becoming aware of the problem.

Let’s say you took out an insurance policy that you only found you had been mis-sold when you came to claim on it 15 years later. At present, you could seek redress from the Ombudsman. Under the new proposals you couldn’t.

Many complaints go back more than ten years. James Daley at Fairer Finance says: ‘Take the car finance scandal, where drivers were not informed about commission charges on their finance deals. 

Some cases go back to 2007. People who were blissfully unaware they’d been ripped off wouldn’t have had their complaint looked at under the new regime.

‘When the ten years are up, chances are companies will breathe a sigh of relief that they are off the hook.’

The shake-up, due in 2026-27, will make initial approaches harder too.

For readers with a complaint, I suggest you act now. First complain to the firm, await its final response, or eight weeks, whichever comes first.

Then contact the Ombudsman at financial-ombudsman.org.uk or phone 0800 023 4567.

• Write to Sally Hamilton at Sally Sorts It, Money Mail, Northcliffe House, 2 Derry Street, London W8 5TT or email [email protected] ¿ include phone number, address and a note addressed to the offending organisation giving them permission to talk to Sally Hamilton. Please do not send original documents as we cannot take responsibility for them. No legal responsibility can be accepted by the Daily Mail for answers given. 

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