Former infant school head Cynthia Rubin has been forced to put her four- bedroom home up for sale after learning that she cannot claim against the Pounds 6,000 mortgage protection policy she took out in 1992.

Mrs Rubin, 49, who has retired prematurely due to ill health, has had her claim rejected by Consolidated Financial Insurance, of Richmond, Surrey, because she was not aware that she had to submit it within 90 days of becoming ill.

The insurance company ruling that has driven Mrs Rubin to the edge of despair is the last of a series of setbacks that she and her husband, Richard, have suffered. Four years ago the Rubins were living in the proverbial lap of luxury. She was earning nearly Pounds 25,000 as head of Westfield Infant School, Runcorn, and he was a Pounds 60,000-a-year production manager.

But then their fortunes turned, just after they had extended their mortage from Pounds 59,000 to Pounds 106,000 in order to build an extension for 52-year-old Mr Rubin’s elderly mother. First, he was made redundant and had to begin working as a freelance consultant for a fraction of his former salary. Then Mrs Rubin lost her job, too, when her school was amalgamated with its sister junior school. She was offered a teaching job in the newly-merged school, but the stress of the merger caused a recurrence of the rare medical condition that she has suffered from for the past three years and she went sick in September 1994.

Mrs Rubin suffers from hypothalamic hyperthyroidism, which is associated with hair loss, depression, weight gain and lack of energy. Nevertheless, she thought she would be able to return to teaching after a break. But by the beginning of May, having been told by the county medical officer that it would be unwise to return to Westfield, Mrs Rubin applied for early retirement on health grounds.

On May 12 she claimed against the mortgage protection policy believing that she was entitled to 12 monthly payments of Pounds 500. But three weeks later she received a letter from Consolidated Financial Insurance saying that her claim had been turned down because of the 90-day rule. The company pointed out that she had taken 162 days to lodge her claim and was therefore ineligible for benefits. But she is determined that the company will open her file again because she feels she has been treated unfairly.

“I took out the policy in February 1992 after seeking advice from a Teachers Assurance representative,” said Mrs Rubin, who is now trying to sell her home for Pounds 170,000 and move to a two-bedroom Pounds 46,000 house. “The rep arranged what is known as a mortgage care plan for me that would last for five years. But he did not say that he was selling me a policy that had been underwritten by Consolidated Financial Insurance and financed by a third company, NWS Trusts. In effect, I was entering into what amounted to a five-year, Pounds 35-a-month credit agreement with NWS, but I didn’t know it.”

Having signed the agreement, Mrs Rubin thought little more about the policy for several months - then she realised that she had still not received a certificate of insurance. Eventually, after a considerable delay that was partly caused by the confusion over who her insurer was, Teachers Assurance sent her a document.

“It purported to be a certificate of insurance, but as there was no name or number on it the document could have referred to anyone. It was only in January of this year - more than four months after I had gone sick - that I was given a copy of my original contract.”

Even then she did not think about claiming against the policy, however, as she was still receiving her full pay from Cheshire County Council. “I took the insurance cover out in order to cover loss of earnings so it would hardly have been ethical to ask for any money until I was out of pocket,” said Mrs Rubin, who is now living on a Pounds 780-a-month pension. “I received my full pay until March of this year and between then and May I was receiving virtually a full pay packet because the shortfall in my salary was being largely made up by government benefits.”

This week Consolidated Financial Insurance defended its decision by saying that benefits from a mortgage policy are available regardless of what sick pay is also received.

The company said it would review Mrs Rubin’s case if more information could be provided on such issues as why her contract was terminated and why she did not put in her claim within 90 days. Lack of understanding of the policy would be taken as a mitigating circumstance, it said.

A spokesman for the Insurance Ombudsman’s office said the problem of late notification crops up quite regularly.

“Normally we say that the company cannot use this argument unless they have actually been prejudiced by the late claim. In some cases it’s true that if the claimant had notified them earlier, he or she could have had medical treatment that would have got them back to work. But that does not seem to be the case on this occasion.”

In the past few days Mrs Rubin has also received some relatively good news about the Pounds 35-a-month payments that were scheduled to end at the start of 1997. When The TES contacted NWS and pointed out that the Rubins resented having to go on making the payments when they couldn’t possibly benefit from them, the company’s spokesman offered to cancel the agreement and backdate the refunds to June 6 - the date that the claim was rejected.

“That could help a bit - in fact it could save us nearly Pounds 700,” Mrs Rubin said. “But I haven’t yet given up hope that we will get all the money that we believe we are entitled to.”