Insurance
Freedom sold life insurance to intellectually disabled man: Royal Commission

Freedom Insurance sold life insurance to an intellectually disabled man, and only cancelled the policy after several instances of correspondence with his family, the Royal Commission heard yesterday.

Giving testimony at the second day of life insurance hearings, Grant Stewart told the Commission how Freedom sold life insurance to his son - who suffers from Down Syndrome - in 2016.

In a recording of a phone call Stewart (his son's carer) made to cancel the policy, a Freedom agent disputes Stewart's assertion that the Freedom salesperson who initially sold the policy would have been able to sense his son was disabled.

"Oh, surely you'd know? I mean he's got very poor speech. I just find that iniquitous that someone could do that," Stewart said.

Despite being promised to be called back, Stewart received no response from Freedom, with the policy for his son still active. Only after sending a letter to Freedom to cancel the policy was action taken, but not before Freedom asked for Stewart's son to verbally agree to the cancellation of the policy over the phone. Recordings of the call demonstrate his son's speech difficulty, with Stewart's son needing to repeat after his father to cancel the policy.

The Commission later heard recordings of phone calls between Freedom sales agents and Stewart's son, including an instance when a sales agent asked the man if he could speak with his mother after the man took time to respond to questions with mostly single-word answers. When the man responds that he doesn't know when his mother will be home, the agent terminates the call and says he will call back later.

In another recording, a sales agent probes the man about his family; selling him final expenses cover he terms "a very special offer."

Throughout the call the man responds in no more than a few words, taking time to respond and seemingly failing to understand the purpose of the conversation. The sales agent tells the man he can have between $4000 and $15,000 in final expenses cover, suggesting $10,000 worth of cover by asking  if "10 (thousand dollars) would be enough to leave behind for them?"

The sales agent reminds the man his cover can be increased to $15,000 asking "are you happy with the 10?" which the man confirms.

When asked to comment on the call, Stewart said he didn't think his son indicated any understanding of what he was signing up for, adding he "would've thought" the sales agent could tell his son failed to understand the call.

"I just thought he had a script in front of him, he was asking the questions he needed to ask until he got the answers he wanted," Stewart said.

The commission also heard Freedom took about two years to issue the family with recordings of the phone calls they had requested in 2016.

Additionally, Freedom dragged its heels in issuing an apology over the incident, doing so just prior to the Royal Commission in August this year through chief operating officer Craig Orton, who appeared before the Commission later on Tuesday.

Read more: life insuranceRoyal CommissionFreedom InsuranceGrant StewartCraig Orton
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