A complainant has lost her bid for a policy reinstatement after arguing she was not told her former husband had become the payer for the cover, premiums were overdue and the insurance had lapsed.

The woman applied for the life policy in July 2015, insuring her and her then husband for $500,000 and $250,000 respectively.

She was the policy owner and her husband the beneficiary under Zurich cover bought through ANZ Bank, which then sold its life business to the Swiss insurer in 2019.

After her former husband died in January 2021, the complainant made a claim, only to be told the cover had lapsed.

She was also told she was no longer the beneficiary of a second policy acquired in September 2015 that insured the ex-husband for $500,000.

Premiums for the first policy were paid from a credit card account provided by the complainant until the husband called the insurer in March 2016 to update payment details.

The insurer accepted the husband’s credit card but gave no further details about the policy without the complainant’s authority.

In March 2018, the ex-husband updated his credit card details. Policy anniversary notices containing payment details were mailed to the complainant’s recorded address in May that year and in 2019.

The complainant said the insurer should not have allowed her ex-husband to change the payment details, because she was the policy owner.

But the Australian Financial Complaints Authority says the change in payment details did not cause the policy to be cancelled.

The insurer sent letters to the complainant at a business premises stating premiums had been declined on September 20 2019 and that premiums were in arrears on October 20 and November 20 that year.

The policy lapsed for non-payment of premium on December 20 2019 and a letter was sent to the complainant notifying her the cover had ended.

“While the complainant says she never attended the business premises after her separation from her former husband, I note the insurer had previously communicated payment issues with the complainant via that address and the previous payment issues had been resolved,” an AFCA member said.

“This means the insurer had no way of knowing that its 2019 communications had not been received by her, as claimed by the complainant.

“AFCA expects consumers to pay reasonable attention to their own interests.

“It is not the fault of the insurer that the complainant did not keep track of the paperwork for the policies or update her address or payment details.”

The AFCA member says it is not uncommon in the insurance industry for another person to pay premiums for a policy they do not own, particularly in a family situation.

“I therefore do not consider the insurer committed an error when it allowed the payment details for [the] policy … to be changed to a different credit card than the one notified by the complainant.”

See the ruling here.