Life Insurance Claim...VOID re: lack of Knowledge of Full Medical History.....?

......The accountant we used had failed to put 'has Arthritis in foot' and thus failing to mention hospital visits and medications prescribed relating to this condition.
This 'non-disclosure' was not directly related to the claim as the death of the claimant was due to lung cancer, but the insurance company stated they would not have offered the same terms if they had had this information at the time, so have now cancelled the policy and all premiums paid will be refunded....
After a phonecall to their advice line we now know we can Appeal this decision and are in the process of doing..
What I would like to know is...Has Anyone ever been successful in Appealing against a Decision same or similar to this one ?
Additional Details
BOB...... I have the letter right here in front of me.....it states they KNOW this non disclosure was NOT directly related to this claim...BUT having had had all the Medical History at the time they would NOT have offered the same terms so the contract between them and us is VOID ...therefore cancelled !

In the UK the strict legal position is that if there is any non-disclosure the insurer is entitled to void the policy. However, the Financial Ombudsman Service (FOS) approach is to categorise these as 'deliberate' (fraudulently gave incorrect information to get a policy not entitled to); 'reckless' (there was a clear question & it was something you should reasonably have known but failed to disclose, though not intentionally); 'inadvertent' (if had been really careful would have disclosed but there is an understable reason for not doing so, such as it was a long time ago) and 'innocent' (there was no non-disclosure - no question asked, something you didn't know).

If the non-disclosure is deliberate the insurer can cancel the policy and keep the premium. If reckless it can cancel the policy but should refund the premium. If inadvertant it should apply the terms it would have applied if it had known the full facts when you applied - this could result in a reduced settlement if the premiums would have been higher but could lead to the claim being paid in full (eg it would have excluded back problems but the claim was for a heart problem) or the claim still being declined (eg it would have excluded heart problems and the claim was for a heart problem). If the non-disclosure was innocent it should be disregarded and the claim dealt with under the standard terms and conditions.

Most insurers adopt this approach too.

If you told the accountant then there is simply no non-disclosure on your part. If the accountant worked for the insurer or was a 'tied advisor' (only sells insurance for the one insurer) then you can continue your case with the insurer.

However, if the accountant was independant of the insurer then the insurer is innocent too. It is no more the insurer's fault hat the accountant did not record the information than it is yours.It simply processed the application based on the information it received. In this case you would need to complain to the accountant about the failure to correctly record the information.

Check out www.financial-ombudsman.org.uk - under 'publications' there is a fact sheet that deals with exactly this. You can telephone a consumer consultant there on 0845 080 1800 if you want to discuss your complaint further and the best way to approach it. They should also be able to advise if the accountant is within their jurisdiction. If not you would have to go through the legal system.

Sorry, but when you apply for Insurance and sign the contract, it clearly states that any mis-information or non-disclosure voids the policy. Insurance companies will find whatever it takes to not pay out on a policy.

I would still definitely try to appeal it, however, I wish you good luck.

It's pretty rare for insurance companies to contest life insurance claims. It seems to me that the insurer is not going to play ball. Appealing a decision on a $500 health insurance claim is difficult enough, let alone a substantial life settlement. The first thing I would do is retain a good attorney.

He or she will likely recommend either:

1) Filing suit with the life insurer
or
2) Filing a claim (and possibly suit) with your accountant's errors and omissions (E&O) insurance. Professionals such as insurance practitioners and accountants carry usually no less than $1M in coverage in the event that something like this happens that may have been the practitioner's fault.

I hope the accountant has a good lawyer. Or does s/he do that too?

Refusing the claim in these circumstances is most unusual. They would normally calculate how much cover they would have given for the premium if the condition had been disclosed.

You should complain both to the insurance company and the accountant (who was acting as your agent). Both should have a complaints procedure. If matters are not dealt with to your satisfaction, you should complain to the Financial Ombudsman about both the Accountant and the Insurance Company.

If the policy started before term assurance became regulated, take it to Court. Courts generally hate insurance companies and accountants.

Call the Insurance Commissioner in your State Capital. You either do not know what you are talking about or someone is lying to you.

A sore foot has nothing to do with lung cancer and is immaterial..

I'll also bet you have nothing in writing from the insurance company, do you.

Something is really, really wrong here

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