No gainful occupation
FOS takes a common sense approach to the meaning of gainful occupation in a mortgage protection policy.
The Applicant is a 53 years old, self-employed bricklayer. He made a claim for disability benefits under the FSP’s Mortgage Protection policy.
Medical opinion established:
- the Applicant had age-related degenerative changes in his knees, lumbar spine and shoulders. The changes resulted in limited endurance and reduced mobility for some physical tasks as a bricklayer; and
- although the Applicant could perform “light work” on a part-time basis, for practical purposes, the combination of physical disability, poor language skills and a history of depression would make it difficult for the Applicant to actually obtain a job.
The policy provided cover for mortgage payments for a period of 12 months from claim lodgement due to the insured’s inability to perform their usual occupation. After this initial period, there was cover for up to a further 18 months, subject to the insured’s total and continuous inability to engage in or attend to any ‘Gainful Occupation’.
The policy defined ‘Gainful Occupation’ as any occupation for which the insured may receive a financial reward.
The concept that an Applicant is fit for any gainful occupation has to be given a reasonable interpretation in the light of the commercial purpose of the policy. The policy purported to cover the insured if he sustained a disability and could not work.
When considering this it is appropriate to:
- look at the individual Applicant and assess the Applicant’s ability to carry out paid work by reference to the Applicant’s qualifications, background and skills; and
- take a realistic and common sense approach and apply the policy wording to the capacity of the Applicant under consideration to undertake a real (not theoretical) paid job.
In considering whether the particular Applicant had capacity to undertake any gainful occupation, FOS noted:
- the Applicant is 53
- he has age-related degenerative changes
- he is unable to work as a bricklayer
- he has no other known trade qualifications or certificates
- his training and experience were solely as a self-employed bricklayer
- he has worked as a bricklayer for 30 years
- it is unlikely he would be competent in clerical work or other non-labouring work because his English was “somewhat limited”.
FOS considered it would not be fair to exclude the Applicant from the benefit of the policy in all the circumstances of the Applicant’s disability and the improbability of him obtaining paid work other than physical labour which he is no longer able to do.