An insurer’s sale of funeral cover, conduct around retention and communications about missed payments were all unfair, the industry ombudsman has ruled.

Hannover Life Re contacted its policyholder 40 times about missed payments, and this amounted to harassment. It must now refund premiums with interest and pay the policyholder $2000 compensation for non-financial loss, the Australian Financial Complaints Authority has ruled.

The complainant was aged 34 when she bought the policy in November 2017. As a single mother of two, she thought it sensible to take out cover. The policy seemed affordable, but she was employed casually as a vegetable picker and the premiums later became too expensive, AFCA says.

The woman said she had been cold called, but Hannover Life Re contended she expressed interest in life insurance through a comparison site.

When she could not get life cover because of her multiple sclerosis diagnosis, the salesperson offered her funeral insurance.

Hannover Life Re said the woman updated payment arrangements at times, which was inconsistent with the suggestion she was pressured into purchasing cover.

The insurer said its salesperson accurately described benefits and premiums to the woman and made comments “in the context of policies held with another provider and through her superannuation”.

But the ombudsman listened to the sales call recording and says the woman did not understand the insurance she had, and how it differed from the funeral cover.

The salesperson pushed the sale “without genuinely ascertaining if she wanted to purchase funeral insurance”, overcame objections, used emotion unfairly and mentioned the woman’s MS diagnosis repeatedly.

The call recording involved unfair sales tactics, the ombudsman says, noting the Federal Court recently found the comparison site the mother used misled consumers about funeral and life insurance.

In 2023, the woman called twice to cancel her policy but was subjected to unfair retention conduct.

Hannover Life Re’s representative made it difficult for her to cancel the policy when she communicated her request clearly and it was well documented she had been having trouble paying premiums.

Read the determination here.