A policyholder who claimed income protection for a cognitive impairment will not receive a payout after the dispute authority found his condition arose while his cover was “on hold”.

The man put his policy on hold in 2014, meaning a reduced premium was charged and no cover provided.

In June 2022, he emailed Resolution Life Australasia to have it reinstated, and the insurer requested information including date of birth, current address and phone number for a security check.  

The policyholder responded with an email stating “info as requested”, but the details were not provided. He said he was later told the email lacked the required attachments but that the insurer had not followed up with him when the email was sent.  

The man provided the information in October 2022, and the insurer resumed cover.

In February 2023, the policyholder made a claim after he was diagnosed with a mild cognitive impairment that stopped him working. Resolution Life declined the cover, arguing he began suffering problems while his policy was still on hold.

Medical records provided to the Australian Financial Complaints Authority showed the man visited a GP in August 2022. The doctor recorded “trouble with low mood ... progressively getting worse ... stated having difficulties with new job ... reduced concentration/memory.”  

A CT scan of his brain later showed a “generalised cerebral parenchymal involution without focal lobar atrophy”.

The records show the man then visited three GPs between September 2022 and March 2023 about memory issues. He was referred to a memory clinic, where a neurologist and psychiatrist observed him. 

One of the GPs, referred to as Dr MA, provided a report last September saying the man had a “neurological problem, not a mental health problem”. He acknowledged the man had also suffered from anxiety and depression, but said this was not because of his memory deterioration.  

In its dispute decision, AFCA says Dr MA’s report did not explain how the findings from the man’s earlier CT scan were not relevant to his current neurological condition.

It says the report did not explain any difference between the symptoms of his current condition and those recorded before the policy came off hold.  

The authority also notes Dr MA previously said the claimant “started to have symptoms a few weeks before I saw him” in September 2022.

AFCA says the cognitive impairment probably began before the policy came off hold, noting the initial symptoms were “bad enough that the complainant had a CT scan on his brain”.

“His cognitive symptoms appear never to have abated and he was disabled for work from late September 2022,” the authority said. “The complainant contacted the insurer about making a claim in September 2022. He at first said that his condition began in September 2022.  

“There is nothing in the contemporaneous medical records which shows the cognitive symptoms ever stopping or the nature of those symptoms changing.”  

Click here for the ruling.