Confusion over the terms surrounding critical illness cover has led the Insurance Ombudsman, Ms Caroline Gill, to recommend that insurers explain its meaning in a notice to prospective policy holders. Cover under a life assurance scheme only applies if the policy holder's illness is on the insurer's list.

In a case study cited in her annual report, Ms Gill adjudicated in favour of a company on the grounds that a complainant had not suffered a heart attack as per the policy definition. The company alleged that "the symptoms experienced by the complainant were, in fact, connected with a significant consumption of alcohol".

In a death claim case involving non-disclosure of the deceased's medical history, Ms Gill found in favour of the complainant.

The deceased had died of cancer but had been previously been treated for mild chronic obstructive airways disease. "I determined that the policy holder did not think that she had a significant medical history at the time of the completion of the application form," Ms Gill stated.

But in another non-disclosure case, Ms Gill found in favour of the company. The complainant, who made a claim for a burglary under his household policy, had failed to disclose previous claims made against another company, claiming he was in some distress when he completed the proposal form. "The proposal form clearly highlighted the need to disclose material facts and pointed out the consequences of failing to do so," Ms Gill stated.