Expert urges us to ‘read the fine print’ of life insurance policies

12/12/2017
Photo: File.

A couple who've shelled out AU$31,000 (NZ$34,000) for life insurance over two decades have been told their policy will expire unless they die before January 17, 2018.

George and Irene Nesbitt, both 89, have been paying life insurance since they were 66 - that's 23 years' worth of payments, which may now tragically prove to be totally worthless.

Mark Sainsbury is joined by Insurance and Financial Services Ombudsman Karen Stevens to discuss how people can be sure their insurance policy is right for them.

“People should be reading their policy documents and making sure that they at least understand what sort of cover they're getting,” she says.

Ms Stevens explains that many people end up forgetting to disclose all relevant health information, which could affect their insurance policy. 

Photo: A Current Affair.

Speaking to 9 News Australia's A Current Affair, Ms Nesbitt said they'd been paying out so they wouldn't worry about their children forking out for their funerals.

But they recently got a letter from their insurance provider Colonial, pointing out that they in fact might, because their policy expires before they turn 90 - a clause Ms Nesbitt says is "disgusting".

Commonwealth Bank, which owns Colonial, said in a statement it was unable to extend the cover on the policy the Nesbitts had signed up for.

"We are in touch with the Nesbitts to explore if there is any kind of assistance that we can offer," the statement read.

The Nesbitts say while they're not sure how just yet, they're willing to fight the policy expiry set by Colonial.

Listen to the full interview with Karen Stevens above.

Morning Talk with Mark Sainsbury, weekdays from 9am-noon on RadioLIVE and streaming live to the ROVA app on Android and iPhone.

The above story was originally published by Newshub, with additions made by RadioLIVE.