An insurer did not mis-sell a funeral policy at inception but over following years unfairly pressured a man to increase his cover, the financial services ombudsman has ruled.

TAL Life does not have to refund the policyholder’s premiums but is required to pay him $1500 compensation for non-financial loss.

The Australian Financial Complaints Authority heard that by age 90, the insured will have paid $35,000 for $20,000 of cover for him and his wife.

The man told AFCA he believed he could stop paying premiums after reaching a certain limit.

The insurer sold the policy by phone in 2014. After listening to the call recording, the ombudsman says the insurer did not engage in unfair selling tactics or misleading and deceptive conduct.

The man was not pressured into buying cover, and the call was not unsolicited, so he is not entitled to a premium refund.

But he was unfairly pressured to increase his cover in yearly calls between 2015 and 2020, even after he asked TAL to stop calling him.

TAL said these were service calls only, but AFCA finds he was also pressured to increase the policy limit.

The nature and frequency of the sales calls were likely to cause unnecessary stress and inconvenience, so TAL should compensate the man for non-financial loss.

Read the determination here.