A pensioner who disputed her insurer’s decision to decline her request for a refund of her funeral insurance premiums has failed to persuade the Australian Financial Complaints Authority (AFCA) to reverse the outcome.

AFCA says Greenstone Financial Services took reasonable steps to explain the policy terms verbally and in writing after the complainant rang the insurer on December 30 2015 seeking to buy a funeral insurance policy.

The complainant claimed the insurer breached its duty of utmost good faith and engaged in misleading, deceptive and unconscionable conduct when it sold her the policy on that day. She cancelled the policy January last year due to concerns about how much the cover was costing.

She says the insurer knew or should have known she was an unsophisticated customer with limited English language skills and financial literacy but the insurer failed to adequately explain the policy terms.

She wants the insurer to refund the $13,318.50 she paid in premiums and pay her $2000 in non-financial loss compensation for the stress caused.

AFCA says its review of the submission shows that while the complainant spoke with an accent and it was clear English was not her first language, there were no signs she did not understand what was said to her.

It also noted that she led the conversation in relation to how much cover she was after and freely chose the $8000 benefit amount after seeking pricing for various options despite being told the insurer could provide amounts down to $3000 and it was clear these would have been cheaper.

At the time of the purchase the insurer’s agent confirmed to the complainant that the policy she was about to buy did not have a savings or investment element, which means if it was cancelled after the cooling off period there would be no cover and she would not receive anything back.

The agent read a declaration to her and informed her she could ask him to stop if there was anything she did not understand. But she did not and agreed to the declaration as well as confirmed she did not require any further confirmation about the policy.

“The insurer took reasonable steps to explain the policy terms to the complainant at the time of purchase and has acted in accordance with those terms,” AFCA says.

“It would not be fair to require it to refund premium or pay compensation in those circumstances.”

Click here for the ruling.