Policy double-up

In 2022, Mr and Mrs Quigley learned that their old policies hadn’t been cancelled when they took out new ones in 2008, and they had paid $18,000 in unnecessary premiums.

Policy double-up

Mr and Mrs Quigley* arranged life and disability insurance policies through their bank in 2004.

In 2008, they arranged new policies with the same insurer, again through their bank, for life, trauma and disability cover. The new policies were to give them higher coverage because they were increasing their mortgage.

Mr and Mrs Quigley believed the new policies would replace the old ones. However, the 2004 policies were not cancelled at this time, and they continued to pay premiums for both sets of policies.

In 2022, they realised that the old policies hadn’t been cancelled and they had paid $18,000 in unnecessary premiums. They requested a refund of these premiums.

The insurer refused, stating there was nothing to make it aware that the 2004 policies should have been cancelled. In addition, they said that Mr and Mrs Quigley had been sent policy schedules each year since 2008, showing the 2004 policies were still active.

Mr and Mrs Quigley made a complaint to the IFSO Scheme.

The IFSO Scheme case manager noted that the bank had assisted Mr and Mrs Quigley with their 2008 application, and was the insurers agent.

Mr and Mrs Quigley said the bank had told them that they needed to increase their life covers because they were increasing their mortgage, and that the 2008 policies were replacement policies.

However, there was no mention of the 2004 policies in the 2008 application.

The case manager found that the bank had failed to ensure the cancellation of the 2004 policies. Balancing this however, was the fact that Mr and Mrs Quigley had been sent premium notices about the 2004 policies for many years, which they had paid.

Following discussions with the case manager, the insurer and bank offered an ex gratia payment of $9,056, covering half the premiums paid for the 2004 policies since 2008. Mr and Mrs Quigley accepted this settlement.

Complaint settled

When consumers cancel an insurance policy, they should make sure they receive confirmation of this, and check their bank statements to ensure the premium payments have stopped.

* Name has been changed

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