A complainant who claimed a $436,543 benefit due to a “loss of independent existence” will not be compensated after a dispute ruling decision found the insured had not met the policy’s terms for a payout. 

The insured suffers from severe fibromyalgia and says the disorder has prevented him from completing everyday tasks. Fibromyalgia is defined as widespread musculoskeletal pain that typically causes fatigue, sleep, memory and movement issues.   

TAL Life declined the claim after determining that the claimant did not meet the Recovery Stand Alone policy’s definition of “loss of independent existence”.    

The policy defines the term as an inability to complete at least two out of five activities of daily living (ADLs) set out in the product disclosure statement (PDS) without the aid of someone else.    

The ADLs identified are bathing and showering, dressing and undressing, maintaining a reasonable level of personal hygiene, eating and drinking, getting in and out of bed, or the ability to move from place to place.    

TAL says its decision relied on a report from an Injury Management Consultant and Occupational Therapist, referred to as SC, who confirmed that the complainant could complete all five of the defined ADLs independently or with the help of special equipment.    

The claimant says the policy did not “adequately warn” him that the benefit was subject to the ADL requirements and that the PDS contains “elements of jargon” to allow the insurer to “exercise a subjective judgement” when determining a claim.   

He says the policy “does not present in plain language to the everyday insured it is balderdash”. 

However, the Australian Financial Complaints Authority (AFCA) was not convinced that the policy had been unfairly worded, noting that the PDS directly defines terms such as “ADL” and that the claimant was able to seek further clarification from the insurer if he had been unsure of the policy terms. 

The complainant says SC’s findings did not reflect his “true condition”, as the assessment occurred while he was “having a good day”.    

The man says a report from his treating rheumatologist, which states that he “has lost all independence with regards to activities of daily living,” was a more accurate representation of his condition.    

AFCA says the report does not address whether the insured could not complete at least two of the ADLs identified by the policy to be eligible for the trauma cover benefit.    

The ruling allows TAL Life to decline the claim but requires the insurer to reassess its decision if the complainant provides a medical report that addresses his ability to undertake the ADLs defined in the policy.    

“I acknowledge that the complainant is suffering from a serious health condition that is causing him ongoing pain and restriction,” AFCA said.   

“However, to be entitled to payment of the $436,543 recovery benefit under the policy, he must establish that he is constantly and permanently unable to perform at least two of the listed ADLs without the physical assistance of someone else.   

“SC’s report is the only medical opinion that specifically addresses the complainant’s ability to undertake ADLs as defined in the policy. 

“Accordingly, based on the provided information, I am satisfied that the insurer is entitled to deny the claim.”      

Click here for the ruling.