Thousands lose their funeral expense cover

Mar 5 2008 by Laura Sharpe, Liverpool Daily Post

THOUSANDS of people across Merseyside have been left without money to pay for their funerals.

Distressed pensioners last night vented their anger at Liverpool-based Medicash for withdrawing the benefit as of April 1.

Policy holders who thought their funeral costs were covered will now have to find the money themselves.

Medicash last night said it had been forced into the move by a third party insurer deciding not to cover them for the funeral costs.

The move also means more than 100,000 members of the healthcare cash plan provider will no longer be entitled to payments towards rehabilitation at home and convalescence.

Medicash last month announced plans to close two North Wales care convalescence homes used by thousands of Merseyside members over the years. Joan Stawton, 73, of Prescot, said: “Do they think it’s fair on the majority of us old people who are left with the worry of how to provide for our own funerals?

“They seem to be picking on people like me who are most vulnerable. We paid the penny in the pound as it was then for most of our working lives.

“We don’t need gyms and such like that they’re offering now. Short of getting run down, we’re out on a limb now.”

Under the Medicash plan, members were entitled to a funeral benefit ranging from £500 to £1,500.

Al Ellis, who has paid into the plan for 60 years, said the changes were a “gross injustice”.

He said: “Medicash have seen fit to close their two convalescent homes in Colwyn Bay and have cancelled their funeral benefits.

“Both of these benefits had prompted me to maintain membership as during the next few years my wife and I could possibly benefit to the tune of some £1,900.”

Letters have been sent to all Medicash members outlining the changes. A clause in the Medicash contract allows the company to change or withdraw services by giving 28 days written notice.

The first night of inpatient stay, birth of a child and child benefit have also been withdrawn.

But new entitlements have been added including optical, dental, day care, personal injury and diagnostic benefits.

The move comes a month after Medicash announced the closure of Mary Bamber and John Braddock Convalescent Centres in Wales with the loss of 39 jobs.

The company blamed £1m operating costs and less than 1% of the membership making use of the homes.

Medicash’s interim chief executive Susan Weir said: “We have carried out extensive research into the needs of our 100,000 plus membership base and the changes we have made to our products are designed to reflect this.

“Of course we understand that we cannot please every individual but the changes have been made to meet the overall needs of our membership and also reflect the changing healthcare market.

“Medicash first introduced funeral benefit in 1996. There are two reasons why we can no longer provide this, the first relates to the level of risk associated with this benefit for Medicash.

“In the past it was re-insured by a third party, when this party informed us that they were no longer in a position to re-insure this benefit we searched for an alternative provider and no-one was willing to take this on.

“Secondly, the Financial Services Authority defines insurance in various different categories. Funeral benefit is classed as life assurance and Medicash is a general insurer not a life assurance company.

“We took legal advice and were advised that it was no longer appropriate for us to offer funeral benefit.

“These factors have meant that it simply would not be responsible for us to continue to provide funeral benefit.

“We have a duty to our members, our employees and the wider community.”

Southport MP John Pugh said he understood members’ disappointment, claiming Medicash’s explanations were absurd.

Mr Pugh said: “This is very disappointing for the elderly and members of Medicash who were led to believe they would be entitled to the payments.”

But Alec McFadden, Merseyside president of the TUC, said many people who had spoken to him welcomed the changes and extra services.

He said: “The people who have spoken to me welcome the changes and are thinking about upgrading their plan to get more benefits.”

Anyone worried about covering the cost of a funeral may be entitled to make a claim under the DSS Social Fund by completing a form from the Job Centre.

A bereavement payment of £2,000 may also be available following the death of a partner

* FOR more information, contact the Citizens Advice Bureau or the Job Centre.

laurasharpe@dailypost.co.uk

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