Husband loses insurance dispute over wife's death

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Legislation that started in March 2019 would have ceased the woman's default cover, unless she responded to a notice saying she wanted it to continue. The trustee said it complied with legislation by emailing the notice, but the complainant said she never received it.

The life insurance policy ceased on July 1 2019. On March 5 2020, the member asked for a replacement of the policy and was covered again. The member died on February 12 2021, and the complainant made a claim for the death benefit.

But AIA declined to pay, after determining that she had died from a preexisting medical condition. The complainant argued that he should be paid the death benefit but the trustee rejected the claim.

The complainant stated that it was never their intention to cancel the death benefit and in fact were relying on the benefit payout as part of her final estate for the family.

He went on to say that the trustee had failed to appropriately notify them that the death benefit would be cancelled.

He said that they had not been initially made aware that the death benefit had ceased. "When we did become aware, via online account, that the death benefit had ceased, we contacted [the trustee] to have it reinstated immediately.” he said.

He said the trustee also did not mention that the new cover excludes pre-existing conditions.

However, the Australian Financial Complaints Authority said it was satisfied and that new cover was explained in the Product Disclosure Statement. The decision to decline the claim is fair and reasonable, it added.

Published:Tuesday, 17th May 2022
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Australian Insurers Face Challenges in Cyber and AI Risk Readiness

08 Mar 2026: Paige Estritori

Recent findings from the PwC Insurance Banana Skins Survey have raised concerns about the preparedness of Australian insurers in managing emerging risks, particularly those associated with cyber threats and artificial intelligence (AI). The survey, which gathered insights from 698 insurance executives across 42 territories, including 37 from Australia, indicates that Australian insurers scored 6.6% lower on the Preparedness Index compared to their global counterparts. - read more

Rising Insurance Premiums Pose Challenges for Australian Businesses

08 Mar 2026: Paige Estritori

Businesses across New South Wales are grappling with substantial increases in insurance premiums, prompting calls for urgent reforms to alleviate financial pressures. According to Business NSW's latest Business Conditions Survey, nearly 80% of businesses have experienced double-digit hikes in insurance costs over the past year, with one in three reporting increases of 30% or more. These surges significantly outpace the annual inflation rate of 2.5%, placing an undue burden on the business community. - read more

AUB Group's Strategic Acquisition of Prestige Marks Global Growth

20 Feb 2026: Paige Estritori

In a strategic move to bolster its international footprint, AUB Group, a prominent Australian insurance broker, has announced the acquisition of UK-based Prestige for $432 million. This acquisition signifies a pivotal step in AUB Group's global expansion strategy, enhancing its presence in the international insurance market. - read more

ACCC Halts IAG's Proposed Acquisition of RAC Insurance

20 Feb 2026: Paige Estritori

The Australian Competition and Consumer Commission (ACCC) has recently opposed Insurance Australia Group's (IAG) proposed $1.35 billion acquisition of RAC Insurance. The regulator's decision is rooted in concerns that the merger could substantially reduce competition in Western Australia's home and motor insurance markets. - read more

Business NSW Advocates for Urgent Insurance Reforms to Alleviate Rising Premiums

12 Feb 2026: Paige Estritori

Business NSW, the leading business advocacy group in New South Wales, has raised alarms over the escalating insurance premiums that are placing significant financial strain on businesses across the state. Recent findings from their Business Conditions Survey reveal that nearly 80% of businesses have encountered double-digit increases in insurance costs over the past year, with one in three reporting hikes of 30% or more. These surges starkly contrast with the annual inflation rate of 2. - read more

Click for more Insurance News

Insuring your most valuable asset

While many people would consider their home or their car to be their most valuable asset, it's your ability to earn an income that is most important in shaping your financial future. Statistically, two thirds of working Australians will suffer an injury or illness that will sideline them for 90 days or more. The majority of these people would not be able to pay their mortgage or meet car finance and other loan commitments without adequate income insurance.

... compare rates & options ...