A Swiss Re Life and Health insurance policyholder whose claim for a terminal illness benefit was declined has lost her dispute with the insurer.

The Australian Financial Complaints Authority (AFCA) ruled the woman, who suffers from gastroparesis and has to get her nutrition through a feeding tube inserted into her intestine, was not entitled to the benefit.

AFCA says while she is very unwell, her doctors have not certified her as being terminally ill.

The policy that she holds with Swiss Re pays a benefit only if she dies or becomes terminally ill and none of the doctors treating her has said she has a life expectancy of 12 months or less. Under the terms of the policy, terminally ill is defined as having a year or less to live.

Additionally the policy does not have cover for disability or serious illness. It only covers for death and terminal illness.

“The complainant cannot reasonably expect the insurer to pay outside the terms of the policy,” AFCA says in the ruling. “The insurer has not mistreated the complainant.

“It gave the complainant $20,000, as an advance payment of the policy, even though it had no obligation to do so.

“In these circumstances, it is not fair to require the insurer to pay further amounts to the complainant.”

She says doctors cannot predict the future but AFCA says while this is true, “they can give their professional and expert opinion on what is likely to happen”.

In the woman’s case, her GP had signed a form saying that her life expectancy was more than 12 months. He later said that her life expectancy was more than 120 months.

AFCA accepts the woman and her family are facing very difficult circumstances but says that is not enough to require an insurer to pay a benefit.

“Fairness requires that the reasonable expectations of the parties be met,” AFCA says. “Usually, that means that an insurer will only have to pay if the policy requires it.

“The insurer has not caused, and is not responsible for, the difficult circumstances in which the complainant and her family find themselves.

“There is nothing about the circumstances of this case that could give the complainant a reasonable expectation that she would be paid outside the terms of the policy.”

Click here for the ruling.