Scottish Widows Limited · DRN-6190875

The complaint Mr and Mrs H have complained about how long it’s taken Scottish Widows Limited (“SW”) to settle Mr H’s critical illness claim and the date from which settlement was made. While Mr and Mrs H bought the policy jointly, Mrs H now holds a lasting power of attorney for Mr H. So, I’ve referred only to her in relation to the complaint. What happened The details of this complaint are well known to both parties. So I won’t set them out in full here. But, to summarise, in 2007, Mr and Mrs H bought life and critical cover from SW. The policy provided decreasing cover over the term, with a starting value of £750,000. The family suffered a tragic loss in 2011. This loss had a catastrophic impact on Mr H’s mental health, including leaving him unable to work. So, in 2016, Mr and Mrs H made a critical illness claim. The policy didn’t specifically cover mental health conditions. So SW assessed the claim under the “Total Permanent Disability” (TPD) section. They concluded that Mr H hadn’t met the TPD definition. So they didn’t pay the claim. Mr and Mrs H continued to pursue a claim on the policy, as they said that Mr H’s condition prevented him from functioning and should be treated as permanent. And they raised several complaints about SW’s decisions not to do so. At the end of 2024, SW settled Mr H’s claim on the basis that he has been diagnosed with Alzheimer’s disease, in addition to his mental health conditions. They backdated the settlement to March 2021, which was the date tests showed significant decline in his cognitive function, and paid Mr and Mrs H £536,661.26. Mrs H complained about the date used to calculate the settlement – which she said should reflect the date SW had had accepted a premium protection claim – and that SW had delayed in processing it. SW didn’t change their decision about the date the claim should have been paid from. They said that earlier cognitive tests didn’t show Mr H couldn’t perform tasks as required by the TPD definition or that he met the definition of Alzheimer’s disease. And they explained the policy criteria in the critical illness policy differed from those used to decide whether to pay premium protection. But SW did accept they’d delayed in paying the settlement. So they paid Mr and Mrs H £545.01 interest and £50 compensation. Mrs H didn’t think this resolved the complaint and brought it to the Financial Ombudsman Service. At around the same time, she made additional complaints to SW about the lack of empathy from their staff, data protection breaches, concerns about the business which sold the policy and the policy definition of Alzheimer’s disease. SW responded by paying £200 compensation for the lack of empathy and a further £50 for how long it took to deal with the complaint. But they didn’t uphold the other aspects

-- 1 of 4 --

Our investigator looked at these issues together and concluded SW didn’t need to do any more than it had to resolve the complaints. While Mr and Mrs H had made previous complaints and wanted the whole history investigated, she noted they’d only referred the complaints addressed in SW’s final responses of January and September 2025 to us within the time limits set out in our rules. So we couldn’t consider the issues raised in earlier complaints. In respect of the claim settlement, she noted that Mr H had to meet a policy definition before any payment could be made. And he only did this in summer 2024. So she couldn’t say it was unreasonable for SW to have backdated the settlement to March 2021, which was the earliest date the evidence showed he may have Alzheimer’s. In relation to the other complaints, she noted that SW didn’t have copies of the documents Mrs H said were sent to the wrong address and had asked for copies so they could investigate. She was satisfied the policy wording had been consistent throughout and it was only when Mr H had a confirmed diagnosis of a covered condition (Alzheimer’s) that the claim could be accepted. She said that concerns about the seller of the policy would need to be referred to them directly. And she thought that the compensation SW had paid Mr and Mrs H was in line with our approach. Mrs H didn’t agree with our investigator’s view. So the complaint’s been passed to me to make a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done that, I’m not upholding Mrs H’s complaint. I know she and Mr H have found dealing with the claim on top of Mr H’s ill health extremely distressing. I’m very sorry that my decision is likely to add to that distress. I hope it will help if I explain why I’ve made it. Like our investigator, I’ve limited my consideration to the complaints addressed by SW in their final responses of January and September 2025. I’m aware Mrs H would like me to look at earlier issues. But our rules only allow us to consider complaints referred to us within six months of receiving a business’s final response. I’ve seen SW’s responses to earlier complaints, all of which set out this time limit. So I can’t fairly consider those here. I can only imagine how difficult life has been for Mr and Mrs H since their loss. But I can only say SW should do more to resolve their complaint if I don’t think they’ve dealt with them fairly, reasonably and in line with the policy terms. No critical illness policy covers every condition. Rather, they set out what conditions are covered and what criteria have to be met for a claim to be paid. This was confirmed in the annual plan summary sent to Mr and Mrs H, which says: “We will pay a lump sum if Mr H is diagnosed as having one of a range of specified critical illnesses….” It’s indisputable that Mr H has been extremely ill since 2012. But mental health conditions aren’t a specified critical illness in the policy. So I think it was fair for SW not to consider a claim on that basis, but to look at whether he met any of the criteria of an illness which was specified.

-- 2 of 4 --

SW reviewed the claim under the TPD criteria. Those criteria say that, for a claim to be paid, a claimant must have been unable to perform at least three of a list of specified tasks continuously for six months – and that situation is permanent and irreversible. All parts of that definition have to be met for a TPD claim to be paid. The complaints relating to whether or not Mr H met those criteria were considered in complaints I can’t look at. So I’m not going to comment further. I’ve seen that SW kept Mr H’s claim under review and in 2022, they received evidence that Mr H may be suffering from Alzheimer’s disease. They didn’t pay the claim at that point because Mr H hadn’t received a definite diagnosis. I don’t think that was unreasonable, because, as with the TPD claim, specific policy terms had to be met before a claim was payable. The term relating to Alzheimer’s disease required a specific diagnosis. And other types of dementia are excluded. No definite diagnosis was available until 2024. So that’s when the policy criteria were met and SW were liable to pay the claim. That means I can’t say it’s unfair for them to have backdated the claim to 2021, nor that they should have backdated it further and paid Mr and Mrs H a larger settlement than they have. In respect of the data breach complaint Mrs H has made, I can see that SW told her they’d been unable to identify correspondence which she says had been sent to the wrong address. They invited Mrs H to send them copies so they could investigate. I can’t see Mrs H has done this. So I can’t fairly consider this complaint further here. I’ve not seen any evidence to support the complaint that policy definitions, and specifically the definition of Alzheimer’s disease, changed throughout the claim. I’m satisfied that it has always required a definite definition of Alzheimer’s and that the definition mirrors the Association of British Insurers’ guidance in place when the policy was sold. I do appreciate that SW’s information requirements did vary. But I’m satisfied this was due to them considering the claim under different heads of cover, as well as considering a premium protection claim, for which there were different criteria. So I don’t think SW did anything wrong here. I note that Mrs H has expressed concerns about how she was treated by both SW and the business that sold the policy. As our investigator explained, we can only look here at what SW did. If Mrs H wants to complain about the other business, she’ll need to direct that complaint to them first. And, while I recognise the strength of Mrs H’s feelings on this matter, I agree with our investigator that the £250 compensation SW have paid to recognise their staff’s lack of empathy is in line with what we’d expect to award. I know Mrs H says the losses she and Mr H have suffered run into millions of pounds. Even if I could consider everything she’s concerned about and upheld her complaints in full, that’s far beyond above the limits on the awards our service can direct a business to pay. So, if Mrs H wants to pursue that level of redress, she’d need to take advice about how to do that. But, for the reasons set out I don’t think SW need to do any more to resolve this complaint. My final decision For the reasons I’ve explained, I’m not upholding Mr and Mrs H’s complaint about Scottish Widows Limited.

-- 3 of 4 --

Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs H and Mr H to accept or reject my decision before 22 April 2026. Helen Stacey Ombudsman

-- 4 of 4 --