Consumer wins insurance dispute after ombud upholds 10% annual benefit increase.
A consumer, known as Mr G, successfully won his case against his insurer at the National Financial Ombud Scheme (NFO) after the company attempted to reduce his long-standing income protection benefits.
The dispute centred on a contradictory policy clause that the insurer claimed had resulted in an 11-year payment "error". However, the ombud ultimately held the institution accountable for its vague wording and long-standing commitments.
Mr G originally took out his income protection policy in February 2007, securing a financial safety net of R45,000 a month in case illness or disability prevented him from working. The agreement provided for an annual benefit increase of 10%. When illness struck just months later, in July 2007, his claim was approved, and the insurer began issuing monthly payouts in July 2008.
For 11 consecutive years, the company faithfully increased Mr G's benefit by 10% each year, providing him with a consistent source of financial security. The long-standing trust between the policyholder and the insurer unravelled in 2019 when the company abruptly halted the fixed-percentage increases.
