The number of people complaining about insurance policies not being paid is on the rise.
In the past three years, the number of complaints to the Financial Ombudsman has almost doubled.
Steve Holland, 57, thought he was fully covered through his insurance – right up until he made a claim after being diagnosed with prostate cancer.
When Mr Holland took out his income protection policy, he explained to insurer Sunsuper that he had previously had back and bowel problems.
“It was okay, they accepted the application form,” Mr Holland told A Current Affair.
But when the diesel fitter attempted to make a claim on his income protection insurance, Sunsuper told him they’d discovered he had also previously suffered from reflux and tendonitis.
“I tried to explain to them I just couldn’t remember those things. I remembered the main events that I thought were really relevant and serious,” he said.
It was a shocking backflip, given Sunsuper had already approved Mr Holland’s income protection claim due to his cancer – and had even already made one payment.
William Barsby from Shine Lawyers said he has seen an “increasing trend” from insurance companies “unnecessarily finding loopholes”.
“Unfortunately, we are seeing an increase in cases where insurance companies are refusing to pay out on life insurance premiums for income protection,” Mr Barsby said.
He has been fighting one of the longest-running cases against an insurance company in Australia.
At stake is $3.5 million.
Mr Barsby is acting on behalf of Damien Beslic, a former IT manager who has spent four-and-a-half years fighting National Australia Bank-owned insurer MLC and AMP-owned financial advisory firm AXA, who sold him this policy.
“My financial advisor explained to me if I ever ended up being unable to do my work, I would simply just submit a claim with MLC and MLC would start paying me my benefits,” Mr Beslic said.
After falling off his chair at work, the former highly paid manager needed to make a claim.
“I picked up the phone, I leaned back, the chair gave way, I started falling towards the desk and I struck the back of my head against something and I ended up on the floor,” he said.
Mr Beslic now has Meniere’s Disease, which he described as constantly having “terrible sea sickness”.
“I can no longer drive a car, drive a bike, I can’t focus on reading a book – I basically can’t function as a normal human being anymore,” he said.
MLC has been honouring Mr Beslic’s income protection claim for the past two years, but has now decided to stop giving him any more money.
“It is one thing that Damien has to endure the ongoing disability of his condition, but having to fight the insurance company as well – that’s causing him a whole other level of distress,” Mr Barsby said.
“My life has become a nightmare because on a daily basis, I have to fight the insurance company,” Mr Beslic added.
Read more at http://www.9news.com.au/national/2015/10/23/19/11/income-protection-insurance-under-the-microscope-as-complaints-to-financial-ombudsman#qFtybRsDYRHhZRI9.99
