Pensioner loses dispute over funeral allowance
January 30, 2023
A pensioner who challenged her insurer’s decision to deny her claim for reimbursement of her funeral insurance premiums has failed to convince the Australian Financial Complaints Authority (AFCA) to reverse the decision.
The AFCA says Greenstone Financial Services took reasonable steps to explain verbally and in writing the terms of the policy after the complainant called the insurer on December 30, 2015 to purchase a funeral insurance policy.
The complainant alleged that the insurer breached its duty of good faith and engaged in misleading, deceptive and impermissible conduct when it sold the policy to her that day. She canceled the policy in January last year due to concerns about the cost of cover.
She says the insurer knew or should have known she was an unsophisticated customer with limited English and financial skills, but the insurer failed to adequately explain the terms of the policy.
She wants the insurer to reimburse her for the $13,318.50 she paid in premiums and pay her $2,000 in non-monetary compensation for the stress caused.
The AFCA says its review of the submission shows that although the complainant spoke with an accent and it was clear that English was not her first language, there was no indication that she did not understand what we told him.
He also noted that she led the conversation on the amount of coverage she was seeking and freely chose the $8,000 benefit amount after asking for pricing of various options despite the fact that the insurer could provide amounts up to $3,000 and it was clear that it would have been cheaper. .
At the time of purchase, the insurer’s agent confirmed to the complainant that the policy she was about to purchase did not have a savings or investment element, meaning that if she was terminated after the cooling-off period, there would be no coverage and she would not receive anything in return.
The officer read her a statement and informed her that she could ask her to stop if there was anything she did not understand. But she didn’t and accepted the statement and confirmed that she didn’t need any further confirmation regarding the policy.
“The insurer took reasonable steps to explain the terms of the policy to the complainant at the time of purchase and acted in accordance with those terms,” the AFCA says.
“It would not be fair to ask him to return the premium or pay compensation in these circumstances.”
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