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Insurer entitled to stop payments on 65th birthday: AFCA

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A man who lodged a successful accident and sickness claim launched a complaint when his insurer stopped paying benefits on the day he turned 65.

The complainant claimed for medial lobe atrophy in April last year on a credit protection policy with St Andrew’s Life Insurance.

The insurer accepted liability and paid benefits until October 8 – saying the policy expired on the man’s 65th birthday.

But the customer complained to the Australian Financial Complaints Authority (AFCA), arguing that he should be paid for a full 36 months – the maximum benefit outlined in the policy – because he made the claim before he turned 65.

But AFCA decided the insurer had acted appropriately.

It says the product disclosure statement (PDS) “clearly sets out” that the insurer will not make payments after the complainant reaches age 65.

AFCA also says the benefit period is “up to” 36 months and can be less.

“I do not accept the complainant’s assertion the wordings the insurer used in the PDS provides a representation he is entitled to a guaranteed 36 months benefit in the event he is unable to work,” the AFCA ombudsman says.

Click here for the full ruling.