The couple had life and trauma insurance but wanted to cancel the life cover.
They went to their own financial adviser for advice, who asked for quotes for trauma and life cover at $20,000 each. These were provided by the insurer.
A month later, the insured couple then contacted the insurer and said they wanted to cancel the policy because they were unable to pay the premiums.
The insurer sent a cancellation letter asking them to confirm by signing, which they did.
A year later, their financial adviser son-in-law asked the insurer whether they had any policies in force. He was told not.
Six months later, the son-in-law contacted the insurer again, saying the man had intended to only cancel his life cover.
He wanted the policy reinstated from the cancellation date because his father-in-law had been diagnosed with pancreatic cancer. The insurer refused.
The insured argued the insurer’s letters had been confusing because it did not refer to trauma cover,.
They complained to the Insurance and Financial Services Ombudsman.
IFSO’s case manager said, while the letters could have been clearer, the couple could have got in touch with their adviser or insurer if they were unsure.
The insurer was not required to reinstate the trauma cover from the cancellation date, nor to pay a trauma claim.
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