Income protection insurance

Types of complaint we see

• If your claim is being paid but you think the amount is wrong

  Most of the cases we see are about claims not being paid. However we do also see complaints about claims that are being paid, but the consumer doesn’t think things have been worked out correctly.

  If you have a complaint like this, it’s important to remember that your insurer has the right to review your health and disability during your claim. This could mean they stop paying if they no longer think you qualify.

  Your insurer needs evidence of your pre-disability earnings. Some important things to consider when it comes to earnings are:

  • If you’re self-employed or work in an industry where your salary fluctuates, such as seasonally, you may want or need to provide evidence of your earnings over a longer period than the policy sets out. This is so an insurer can work out your average earnings and make a fair payment.
  • Our service doesn’t provide an accountant or actuarial role. We can review calculations to see if the right information has been used and in the right way, but we wouldn’t break down complex calculations or do our own calculations.
  • We understand that reporting self-employed or small business income can be complex. The way you’ve reported or recorded this is likely to be based on advice from your accountant. Your policy terms should set out what figures will be used for the policy benefit, so you should read these carefully. Standard policies may not deal with self-employed income in the way you expect or need, so it’s important to check your policy is suitable for you.
  • When you claim, an insurer will ask for evidence of your pre-disability income and base what it pays out on this and the policy terms. So it’s important you are honest about your income and get the right level of cover. We sometimes see complaints where people have declared a higher income than they really earn at the point of sale, with the hope of claiming this figure later.

• Group policies taken out by an employer

  Lots of employers give employees the option to take out income protection cover as a work benefit. This could mean the employer contributes some money, or the policy is paid for through a salary deduction.

  If you have this type of policy, you’re not the policyholder – your employer is. These policies are often called ‘group schemes’.

  If you’re in a group scheme, we can consider a complaint if the policy was taken out for your benefit. This is where your employer intends to pass some of the policy benefit (payments) to you.

  However, any award we make will go your employer as the policy holder. We would expect an employer to pass benefit on to you. But we can’t get involved in disputes about this if it doesn’t happen. We can only look at the insurer’s actions and if it has correctly paid the employer.

  We know that workplace issues or disputes can be part of the reason you don’t feel able to go to work. It can be upsetting to find out that your employer will be paid the benefit from any successful complaint, or that an insurer may be talking to your employer about your claim. But the employer is the policyholder, so they do have a right to some information about their policy.

  If there’s a specific reason you think you should be paid directly, you can tell us about this. However, we may not be able to tell an insurer to pay you directly. A workplace dispute in itself isn’t likely to be enough to change who the funds are paid to.

• Assessing your level of ability

  If you complain that your insurer is unfairly declining your claim, we’ll need to assess your ability to work. We need to decide whether you’re unable to work as defined by the terms of the policy. We’re not medical experts – we’ll make a decision based on the expert evidence we see.

  When we consider a case, we sometimes have to reach a conclusion about your level of disability. There are four main categories for disability in income protection insurance. These look at whether you can perform:

  • your ‘own occupation’ – this is the role you had just before you became disabled
  • ‘any suited occupation’ – this refers to other job roles that you might be able to do if you can’t do the job you were doing before you became disabled
  • ‘any occupation whatsoever’ – a policy with this term means that you’ll only be paid where you’re unable to carry out any occupation at all
  • neither your ‘own’, ‘any suited’ or ‘any’ occupation, because you’re considered to have ‘total disability’ – some policies say you must experience ‘total disability’ to get paid benefit. This will be defined by the policy terms. We look at whether you are totally unable to perform the essential or material and substantial duties of your ‘own’, ‘suited’ or ‘any’ occupation

  Your policy may not include all of these.