As part of the Life Code Independent Review Consultation Paper, the FRLC’s submission states that, while acceptance rates are generally high and the industry has made strides forward in ensuring certain groups can get better access, such as the recent ban on genetic testing, others are still feeling locked out.
“While we acknowledge that claims acceptance rates are generally high (with some notable exceptions), and the estimated average duration of a claim are on average ‘good’ it is the proverbial 20 per cent of the 80:20 rule whose experiences are far from ‘good’ who our services hear from and work with,” the submission stated.
“It is this group of people who are experiencing poor communications practices and never ending delays, who feel they are being discriminated against when they find themselves subject to a blanket health exclusion or on the wrong end of a sector who has failed to proactively address a legacy of mis-selling.”
The FRLC argued that the current Life Code has “fallen behind” community expectations and is actively contributing to the problems many are facing, citing things as the “overly broad get-out-gaol-free card” of “circumstances beyond our control”.
One group the FRLC advocates for in this regard are sex workers.
“Life insurance (and other insurances) can be difficult to obtain for sex workers,” the submission states.
“The ‘Worth the Risk’ report found that 83 per cent of respondents who were a current or former sex worker had experienced discrimination or exclusion by an insurance advisor or broker.”
It is also highlighted that the occupational categorisation of sex work means many within the profession are excluded from life insurance or subject to restrictive definitions.
Over 70 per cent of sex workers have experienced intrusive questioning, including about their sexual history, and have been subjected to outdated language such as “prostitute” on insurance forms. These practices can dissuade many sex workers from applying for life insurance or disclosing their profession on any application forms, something that can have legal consequences for them down the track.
Another group the FRLC highlighted as facing discrimination and difficulties in the claims process are people with blood-borne viruses and diseases such as HIV.
“Despite medical advancements that have dramatically improved life expectancy and health outcomes, people with HIV continue to be denied insurance coverage or offered coverage on substantially less favourable terms, reinforcing stigma and financial insecurity,” the submission said.
The Worth the Risk report found that just 6 per cent of respondents living with HIV feel comfortable disclosing their positive status, with another 55 per cent assuming that they would be excluded from taking out certain insurance policies.
Many also cite experiences such as lack of explanation for coverage decisions, inappropriate that are irrelevant to the claims process, unsolicited offers for funeral cover and generally emotional distress.
“These concerns remain despite the advent of antiretroviral drugs, through which HIV can be effectively treated, with thousands of Australians receiving this treatment each year.”
The FRLC acknowledged that CALI has updated the Life Code to introduce commitments regarding HIV, including addressing inappropriate underwriting practices for insured taking PrEP, a highly effective HIV prevention medication.
In terms of sex work, the FRLC recommended that a provision be introduced that the profession is treated like any other occupation in determining the cover insurers offer, and that workers will only be asked questions that relate directly to their work, among others.
For those with blood-borne viruses, the legal organisation recommends an extensive overhaul of current practices, such as adding provisions that insurers will not impose blanket exclusions for blood-borne viruses and another additional provision that where the virus is being treated or has been cured, insurers will review, with a view to removing, exclusions or premium loadings.
“By its very nature then, life insurance involves considering and making decisions regarding the worst life can throw at you – circumstances that are for many difficult to conceive of and to deal with psychologically,” the submission said.
“Just the act of thinking through the consequences of these circumstances when considering purchasing a life insurance product can leave people susceptible to risks of exploitation and manipulation due to the multitude of complex feelings of familial obligation or expectation that can arise.”
