Scottish WidowsFeb 16 2023

Scottish Widows takes 100 days to pay out critical illness claim

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Scottish Widows takes 100 days to pay out critical illness claim
A complaint page on Facebook set up for Scottish Widows customers last year has grown from 60 to nearly 500 members in just over six months [FTAdviser/Carmen Reichman]

Scottish Widows has come under increasing fire over service levels, after failing to pay out on a critical illness claim for more than 100 days and taking more than six months to process a pension transfer. 

Adviser and clients have told FTAdviser of some severe issues around service levels in both the pensions and protection parts of the business. 

In one case, Scottish Widows took more than 100 days to pay out on a policyholder’s CIC after she was rushed to hospital with a brain tumour and told she’d have her claim processed in just 10 days. 

In another, an adviser's elderly client, who was in ill health, wanted to move his money into an arrangement that would be more immediately beneficial to him. This transfer, the adviser claimed, took more than six months. 

This news analysis focuses on each in turn.

The CIC claim

FTAdviser was contacted by a client, who wished to remain anonymous, who said she felt helpless after facing delays to her six-figure payout amid being unable to work and facing mounting mortgage payments.

She had received an unexpected brain tumour diagnosis on September 17 2022. But when she was rushed into hospital two days later for her operation, until her first payout at the end of December followed by a second payout in January, Scottish Widows continued to collect her premiums.

This was despite her being unable to work or pay her bills.

Together, she and her brother-in-law put an enquiry together to Scottish Widows and she signed papers to say her brother-in-law could manage the policy on her behalf - especially as she contracted meningitis following her first operation.

“Most people take out this policy with no intention of cashing in. This was never on the cards for me,” the client told FTAdviser. 

During a time where I needed to remain calm, I was incredibly stressed.Scottish Widows client

“It’s hard to say how much they’ve [Scottish Widows] impacted my recovery during a time where I needed to remain calm. It felt like the equivalent of a babysitting exercise.”

Administrative staff refused to deal with her brother-in-law because he wasn’t the policyholder, despite him having the client's signature.

After back and forth with the same paperwork, an administrator assured her the medical team would write a letter to her mortgage provider assuring that the money would be paid, but the payout was yet to be approved and no letter was sent.

She was then probed by the medical team, asked if she knew she was ill prior to discovering the brain tumour.

“I felt like they were actively trying to find fraud in my claim,” she recalled.