Family face ruin after Scot Wids CI policy ‘falls short’

A woman has claimed that Lloyds Bank advised her to change a joint life policy, only to later discover the new policies did not pay out when her husband became ill as his heart attack was not deemed severe enough.

Melanie Randall, 46, of Peterborough, claimed she and her husband had originally taken out a Scottish Widows joint life critical illness policy.

However, after taking advice from an in-house adviser, Lloyds sold them two individual policies. She claimed that she was told her husband Kevin, whose family has a history of heart attacks, would still be covered.

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But when Mr Randall did have a heart attack they were told the bank would not pay out. She claimed the couple were mis-sold the policy, saying: “We were told it was exactly the same as the previous one.

“We have not had an apology and we have got two children. We are in financial ruin. If we had the older policy it would have paid out. I feel we have been pushed under the carpet.”

Mr Randall, 51, had his heart attack approximately five years ago. At the time, he was insured by Scottish Widows, a subsidiary of Lloyds Bank.

He was admitted to Papworth Hospital in Cambridge where he had three stents fitted.

In 2008, the couple remortgaged their house to consolidate their debts and to pay for a conservatory. Ms Randall claimed they met with an in-house Lloyds Bank adviser who told them to cancel their existing joint policy and set up two new single policies, saying they were exactly the same.

But 18 months later Mr Randall survived a heart attack, and their policy did not pay out the £83,000 they had anticipated.

Ms Randall took his complaint first to the Financial Ombudsman Service, which found in favour of Lloyds Bank and cleared it of mis-selling.

Ms Randall said: “We then took it to a solicitor who said we had a good chance of winning but wanted £2,500 upfront. If we lost, we could lose our house. The chances were frightening and we had been through enough already so we declined.”

Lloyds Bank customer services has since offered the couple £150 for taking too long to handle the issue, Mrs Randall said.

A spokesman for Scottish Widows said: “We are committed to paying out whenever we can and in 2013 paid out 90 per cent of all critical illness claims.

“Mr Randall’s claim was declined as his condition did not meet the severity defined in the product literature, which is in line with the ABI Statement of Best Practice.

“The final decision from the Fos looked at the wording of the definitions of heart attack between the old and new policy, and concluded there was such a fine distinction between the two policies that it would not influence the customers’ decision to take a new policy, given Mr Randall’s family history of heart problems.”

The Financial Ombudsman Service declined to comment, adding that it does not publish the results of decisions made before April 2013.