Traditionally in cases where a joint life policy is taken and one of the policyholders dies during the term, if evidence of reckless or deliberate non-disclosure were to come to light then the claim would be declined and the policy would be cancelled leaving the surviving policyholder with no cover. This person could then potentially face much higher premiums if they were then to apply for a new policy and their health had deteriorated in the intervening period. Legal & General will now offer a single life policy and the premiums would be the same as if that person had taken out a single life policy originally, rather than a joint one.
Russ Whitworth, underwriting and claims director for protection, said: "Admittedly it is pretty rare for us to cancel a joint life policy as a result of significant non-disclosure, but it does happen. In this scenario the surviving partner is left with no cover through no fault of their own and so we have taken steps to help these people. We think that it is fairer to set up a single policy and then only charge them the premium that they would have paid at the time than to make them apply for cover all over again."