When his family contacted MLC Life, which was previously owned by the National Australia Bank but now part of the Japanese group Nippon Life Insurance, they were told that the policy was a term life insurance policy, which meant that “the coverage is guaranteed renewable for a defined period. of time or “term” (in this case, until 2036). This is not a whole life insurance policy, which means there is no cash value. It is also not a “paid” policy. Therefore, this means that for a term life insurance policy, the premiums will remain payable as long as the policy is in force. There is no option to stop or suspend payments without affecting the policy currency. “

MLC Life blamed the advisor but continues to collect the premiums. “Financial advice is a confidential matter between the advisor and his client, and we are not aware of the advice given,” MLC said.

This despite the fact that the application form was reviewed and accepted by an MLC insurer, which included details of his medical condition, pension status and annual income.

The problem is systemic.

Life insurance lawyer John Berrill of Berrill & Watson Lawyers was interviewed by The Sydney Morning Herald and Age to evaluate the product, Pam K’s application form and the MLC Subscription Agreement, and was appalled.

John Berrill helps an 85-year-old fight a massive insurance company for justice. Credit:Photo: Jason Sud

“These types of products are never suitable for sale to people over a certain age,” he said. “In what universe is this a suitable product to be sold to a 70-year-old?

“MLC Life is responsible for designing the product and bringing it to market without age restrictions,” he said.

Berrill, who has evaluated hundreds of insurance policies over the years, said the loophole was selling a policy with growing sums insured with no age limit.

“MLC Life is trying to wipe their hands by saying the financial advisor is to blame but it’s the design of their products,” he said.


“How can such a product be suitable for selling to retirees?” The risks are too high. There is a clear disconnect between the premiums you start with and those you keep paying. “

Berrill believes it is the industry’s responsibility to clean up these types of products and put in remediation programs instead of just shutting the products off to new sales.

He said the Australian Securities and Investments Commission (ASIC) has an obligation to review legacy products. “The royal commission was a wake-up call to look at products sold a long time ago because the products are old but the consequences are current.”

He said ASIC should review institutional remediation programs as part of its review.

The MLC product was closed to new sales in 2011, but the company said it continues to offer products with similar functionality to new clients advised by licensed financial planners.

He declined to reveal how many people of retirement age had sold these products over the years or how much he had earned in bonuses from this cohort of retirees. In a statement, MLC said that this was a “modest proportion of new policies issued” and that between 2018 and 2021 “new clients in this age group represented for us less than 1% of new ones. insured and 0.4% of the total sum insured. “

He followed up with the statement, “to give you a proportionate sense given the more recent numbers for our current and equivalent on-sale product, we’ve had around 400 new policies with death coverage for this age group since 2018, at from a total number of approximately 44,000 new policies started with death cover.

When Pam K asked for help, no one listened. “I have sought help in finding a solution to this problem from government agencies, a cabinet minister, MLC executives, NSW Law Society, law firms and NSW Fair Trading without success. No one is interested in supporting the elderly these days – our electoral lifespan is limited, ”she said.

The Australian Financial Complaints Authority (AFCA) was unable to assess his case as it dates back more than six years, a scarecrow for many inherited policyholders.

The Royal Commission on Financial Services completed its report in 2019, which featured a litany of bad advice and shoddy products driven by greed and refusal to admit mistakes. It seems that not much has changed.

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