A senior Christchurch lawyer diagnosed with cancer and given a poor long-term prognosis is taking insurer Asteron Life to the Court of Appeal following the non-payout of $1.2 million in coverage.
The lawyer, Hugh Roderick Catherwood, said that the insurer breached its contract when it declined to pay him the full $1.2 million in life insurance following his cancer diagnosis. Asteron Life has since responded, claiming that he did not qualify for the payout as treatment was available to him that would likely increase his chances of surviving.
According to a report from the NZ Herald, Catherwood has maintained a life insurance policy since 1976. In 2009, at the advice of his broker, he got a life policy with Asteron Life. This policy provided a death benefit that would be paid should he die and promised to pay if he became “terminally ill.” The policy reached more than $1.2 million in 2012.
Following his wife’s passing from breast cancer in 2018, Catherwood also underwent medical tests to check his own health, despite feeling well. To his shock, however, the tests revealed a tumour at the top of his stomach; in 2019, he was diagnosed with esophageal adenocarcinoma, a type of stomach cancer. By the end of January in that year, he was told he would likely die in 12 months without treatment.
In the same year, he underwent a total of sixteen weeks of chemotherapy plus a surgery in May. Although his chances of survival vastly improved, his five-year outlook for survival was still less than 50%.
Under these conditions, he made a claim under his trauma recovery insurance and received $584,185. However, Catherwood insisted that he should have received full payment of $1.2 million as he was, to quote the policy, “terminally ill.” Under the policy, a person is “terminally ill” when “your life expectancy is, due to sickness and regardless of any available treatment, not greater than 12 months.”
An earlier suit from Catherwood ruled in favour of Asteron Life, which said that it refused to pay since treatment was available that would increase the lawyer’s chance of survival. Catherwood is now taking the case to the Court of Appeal, claiming that the previous judge failed to interpret the relevant definition and wording in Asteron Life’s insurance policy.
In 2020, Asteron Life won a legal battle against Dunedin-based insurance broker Peter Taylor over coverage of an income protection policy.
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