Mortgage insurance in case of death

How can one claim repayment of a loan from an insurance company in the event of death of a borrower who has additionally taken out life insurance?

In 2017, Tomasz Z. concluded a mortgage loan agreement with one of the banks. According to it, he undertook to take out life insurance in order to secure the repayment of the mortgage in the event of his death. The borrower concluded such an agreement with one of the leading insurance companies.

Tomasz Z. died unexpectedly in 2020 as a result of liver disease. After the death of the insured, his wife, Barbara Z., who was the heiress, applied to the insurance company for the payment of the due benefit under the loan insurance contract concluded for this occasion. However, the insurer refused to recognize the claims and pay the benefit, referring to the provision contained in the General Terms and Conditions of Insurance, according to which they are not liable in a situation where the death of the insured person occurs as a result of diseases that were diagnosed or treated within five years before concluding the insurance contract. The Insurance Company indicated that such a circumstance had occurred in the case in question, and Tomasz Z. died as a result of diseases that were treated at the indicated time.

The insurer based its decision on one entry in the medical records, stating that Tomasz Z. had undergone a control ultrasound of the liver a few years before signing the loan insurance contract. After the examination, the insured person was recommended to take only vitamin B12 and was referred for a complete blood count. Since then, Tomasz Z.'s liver has not shown any disturbing symptoms. However, this entry was sufficient for the insurer not to settle the claim. As a result of this decision, the family of the deceased was obliged by the bank to repay the remaining part of the loan.

The provision contained in the general conditions of the insurance, excluding the insurer's liability for the death of the insured, if the death was caused by diseases that were diagnosed or treated within five years before the start of the insurance company's liability, is the so-called "abusive clause".

Abusive clauses are otherwise prohibited contractual provisions. In accordance with Article 3851 § 1 of the Civil Code, "provisions of the contract concluded with the consumer, not individually agreed, do not bind them if they shape their rights and obligations in a manner contrary to good practice, grossly infringing their interests (prohibited contractual provisions)".

In the present case, the applicant encountered such a provision by the insurance company. Therefore, they turned to a compensation office to pursue their claims. After filing a complaint against the insurer's decision, which did not bring the expected result, Barbara Z. - already through a lawyer - turned to the Financial Ombudsman with a request to investigate the fact that the insurer refused to pay the benefit for her husband's death.

In response, the Financial Ombudsman confirmed that the insurance company was unreasonably evading liability, and cited an illegal contractual provision as the basis. Moreover, the insurer was also disadvantaged by the fact that, when concluding the contract with Tomasz Z., the insurer refrained from carrying out a medical risk assessment, and did not inquire about his health, treated diseases, etc., which could have had a significant impact on the insurance company's assessment of the insurance risk. In addition to the insurer's failure to perform a detailed medical interview and the inconsistency of the contractual provision with decency, the insurance company also violated the principles of social coexistence.

Despite attempts to resolve the matter amicably, the insurance company did not accept liability for the insured event, i.e. the death of Tomasz Z., and still refuses to pay the benefit. Therefore, it was necessary to bring an action against the insurer in order to claim the benefit due to Daniel Z.. The case in court is being handled by the legal team of the Polska Kancelaria Pomocy Poszkodowanym. We will inform you about its effects after the case is completed.