Income protection or critical illness claim declined: what now?
The short answer
Protection claims are often refused because the illness doesn't meet the policy definition, the evidence is disputed, or the insurer says an application answer was wrong. The 2012 disclosure law limits what it can do over an honest mistake. Complain to the insurer first, then to the free Financial Ombudsman Service.
If your income protection or critical illness claim has been declined, the insurer has to give you a reason, and you have a right to challenge it. Common reasons fall into three groups: your illness doesn't meet the policy's definition, the insurer disputes the medical or earnings evidence, or it says you answered a question on your application inaccurately. Each has its own rules, and the law limits what an insurer can do over an honest mistake.
The route is the same whichever reason applies. Complain to the insurer in writing. If it doesn't put things right, or eight weeks pass without a final response, you can take the complaint to the Financial Ombudsman Service, which is free. This guide explains the reasons, your rights and the steps.
How often claims are paid
The ABI reports that 97.9% of individual protection claims were paid in 2025. So a refusal is unusual, but it does happen, and the Financial Ombudsman Service says most of the income protection cases it sees are about claims not being paid.
Why protection claims get refused
The illness doesn't meet the definition
Protection policies pay on definitions, not diagnoses. A critical illness policy pays only if your condition meets its wording, for example the ABI's minimum definition of cancer excludes cancers classed as in situ or of low malignant potential. An income protection policy pays only if you meet its definition of incapacity, whether that is being unable to do your own job, a suited job or any job. See our guides to critical illness cover and income protection.
The evidence is disputed
The Ombudsman looks at the evidence you provided of your disability and your ability to do your job under the policy's terms. For critical illness claims, it says it normally gives more weight to a specialist consultant's evidence than a GP's, and that an insurer cannot make you have serious or invasive surgery to prove your claim. For income protection, insurers can review your health during a claim and may stop paying if they think you no longer qualify. Stopped claims are a common complaint.
Earnings can't be proved
Income protection pays a share of your earnings, so the insurer needs evidence of what you earned before you became ill. The Ombudsman says self-employed people and those with fluctuating income may need to provide evidence over a longer period than the policy sets out. It also says it has seen people declare a higher income than they really earned when buying a policy. See our guide for the self-employed.
The insurer says you misrepresented something
The Ombudsman says many critical illness cases involve an insurer alleging non-disclosure. MoneyHelper gives the common example of not disclosing a pre-existing medical condition. This is where the law gives you real protection.
Your rights: the Consumer Insurance (Disclosure and Representations) Act 2012
For personal policies taken out or changed since 6 April 2013, this Act (often called CIDRA) sets the rules across the UK, including Scotland.
Your duty is reasonable care. Section 2 says your duty is to take reasonable care not to make a misrepresentation to the insurer, and that this replaces the old duty of disclosure. So the focus is on the questions you were actually asked. MoneyHelper suggests noting whether the insurer actually asked for the information it now says you failed to disclose.
The insurer must show it mattered. Under section 4, the insurer has a remedy only if it shows that, without the misrepresentation, it would not have offered cover at all, or would have offered it only on different terms.
What the insurer can do depends on why it happened. Section 5 says a misrepresentation is deliberate or reckless if you knew it was untrue or misleading, or didn't care, and knew it was relevant to the insurer, or didn't care. Anything else is careless. It is for the insurer to show it was deliberate or reckless.
| Type of misrepresentation | What the insurer can do (Schedule 1) |
|---|---|
| Deliberate or reckless | Cancel the policy, refuse all claims, and keep premiums unless that would be unfair |
| Careless, and the insurer would not have offered cover at all | Cancel and refuse claims, but must refund premiums |
| Careless, and the insurer would have added different terms (such as an exclusion) | Treat the policy as if it had those terms |
| Careless, and the insurer would have charged more | Reduce the claim proportionately: pay the premium you were charged divided by the higher premium, times 100, as a percentage of the claim |
As an illustration only: if you paid £20 a month and the insurer shows it would have charged £40 had it known, it can pay 50% of the claim rather than nothing.
Your rights: the FCA's claims rules
The FCA's rules (ICOBS 8.1.1R) require insurers to handle claims promptly and fairly, give reasonable guidance to help you make a claim and information on its progress, not unreasonably reject a claim (including by cancelling or avoiding a policy), and settle promptly once terms are agreed. The FCA's Consumer Duty, which applied to open products from 31 July 2023, adds expectations under four outcomes, one of which is consumer support.
For policies taken out or varied on or before 5 April 2013, before the 2012 Act applied, ICOBS 8.1.2R says it is unreasonable, except where there is evidence of fraud, to reject a claim for non-disclosure of a fact you could not reasonably be expected to disclose, or for a non-negligent misrepresentation.
How to challenge a declined claim
- Get the reasons in writing. Ask for the policy wording the insurer relied on, the medical evidence it used and, if it alleges misrepresentation, a copy of your application answers and what it says it would have done differently.
- Check the facts. MoneyHelper suggests highlighting the exact policy wording that you think covers you, noting anything ambiguous, and checking whether you were asked the question the insurer says you got wrong.
- Gather your own evidence. A report from your treating specialist, records of your earnings, and anything you sent the insurer about changes in your circumstances.
- Complain in writing. Mark it "complaint", give your policy number, explain why you think the decision is wrong, include your evidence, and say what you want the insurer to do. The insurer normally has up to eight weeks to send a final response.
- Go to the Financial Ombudsman Service if you're unhappy with the final response, or if eight weeks have passed without one. You normally have six months from the date of the final response.
Time limits
You usually need to complain to the insurer within six years of the problem, or within three years of when you knew, or should reasonably have known, you had cause to complain. The Ombudsman may accept late complaints in exceptional circumstances, such as serious illness, or if the insurer didn't send a valid final response.
What the Ombudsman can award
If the Ombudsman upholds your complaint, it typically requires the insurer to pay the claim with interest from when it should have been paid. For complaints referred on or after 1 April 2026, the award limit is £455,000 for events on or after 1 April 2019 and £205,000 for earlier events. If you accept a final decision, it's unlikely you could take the insurer to court for more later. The service is free, and you don't need a paid representative.
What to check in your policy
- The definition the insurer relied on, word for word, and whether the decision letter quotes it accurately.
- The incapacity definition for income protection: own, suited or any occupation.
- For critical illness: the full condition definition, any partial payment for less severe cases, and whether the policy follows the ABI Guide to Minimum Standards.
- The deferred period and whether you were off work for all of it.
- Your application answers: request a copy and compare them with the questions actually asked.
- The date the policy started or was last changed, which decides whether the 2012 Act applies.
- Earnings definition and evidence requirements for income protection.
- Review and termination clauses that let the insurer reassess an ongoing claim.
- The complaints section, which should explain the insurer's process and your right to go to the Ombudsman.
When to get help
You can complain on your own; MoneyHelper says the Ombudsman would prefer to hear from you in your own words. If the dispute turns on legal points, such as whether a misrepresentation was deliberate, or the sums involved are large, a solicitor can help. Citizens Advice can also help you prepare. If you are considering replacing a policy after a dispute, a regulated adviser can explain the options. InsuredRight's free policy check can help you find the clauses above before you write your complaint.
Not sure what yours says? Upload your income protection documents and we'll show you the cover, the exclusions and the conditions, with the wording behind each.
Check my policyCommon questions
Can an insurer refuse my claim for something I forgot to mention?
Only within limits. Under the Consumer Insurance (Disclosure and Representations) Act 2012, your duty is to take reasonable care not to misrepresent anything. The insurer has a remedy only if it shows it would not have offered cover, or would have offered different terms, had you answered correctly. If the mistake was careless rather than deliberate, the remedy must match what it would have done, which may mean a reduced payout rather than nothing.
How long do I have to complain to the Financial Ombudsman?
You normally have six months from the date of the insurer's final response letter. You can also go to the Ombudsman if eight weeks have passed since you complained and you have not had a final response. Separately, you usually need to complain to the insurer within six years of the problem, or three years of when you knew or should have known you had cause to complain.
Does it cost anything to use the Financial Ombudsman?
No. The Financial Ombudsman Service is free for consumers. You do not need a solicitor or claims management company, and MoneyHelper notes that if you use one you may have to pay their fees out of any compensation. A friend, relative or Citizens Advice can help you prepare the complaint.
What can the Ombudsman make an insurer do?
If it finds a claim was wrongly refused, the Ombudsman can require the insurer to pay the claim, usually with interest from when it should have been paid. For complaints referred on or after 1 April 2026 about events since 1 April 2019, the award limit is £455,000. If you accept a final decision, it's unlikely you could take the business to court for more later.
My income protection payments have been stopped after a review. Can I challenge that?
Yes. The Financial Ombudsman says insurers have the right to review your health during a claim and may stop paying if they think you no longer qualify, but stopped claims are a common complaint it looks at. Ask the insurer for the medical evidence and the policy definition it relied on, get your own specialist's view if you can, and complain in writing if you disagree.
Does the 2012 disclosure law apply to my old policy?
The Consumer Insurance (Disclosure and Representations) Act 2012 came into force on 6 April 2013 and applies to consumer policies taken out, or varied, after it came into force. For policies taken out or varied on or before 5 April 2013, the FCA's rule ICOBS 8.1.2R says it is unreasonable, except where there is evidence of fraud, to reject a claim for non-disclosure of something you could not reasonably be expected to disclose, or for a non-negligent misrepresentation.
Sources
- Consumer Insurance (Disclosure and Representations) Act 2012, sections 2, 4, 5 and 12 checked 2 Oct 2026
- Consumer Insurance (Disclosure and Representations) Act 2012, Schedule 1 (insurers' remedies) checked 2 Oct 2026
- FCA Handbook ICOBS 8.1: claims handling checked 2 Oct 2026
- FCA PS22/9: A new Consumer Duty checked 2 Oct 2026
- Financial Ombudsman Service: Income protection insurance checked 2 Oct 2026
- Financial Ombudsman Service: Critical illness cover checked 2 Oct 2026
- Financial Ombudsman Service: How to complain checked 2 Oct 2026
- Financial Ombudsman Service: Time limits checked 2 Oct 2026
- Financial Ombudsman Service: Compensation and award limits checked 2 Oct 2026
- MoneyHelper: Why providers might reject your insurance claim, and what to do checked 2 Oct 2026
- ABI: Protection insurers pay out £7.84 billion to help customers safeguard their finances (2025 figures, published June 2026) checked 2 Oct 2026
This guide is general information about how insurance works in the UK. It isn't advice and doesn't take your circumstances into account. Policies differ: your own policy documents are what count.