AFCA allows Life Insurer to stop paying Income Protection Insurance payments

An insured self employed mechanic was working as a sole trader. He broke his arm in late 2017 and made an income protection insurance claim with AIA . He said he was totally disabled. He also had hernia surgery in March 2019. The insurer paid total disability benefits until May 2019. The insurer (AIA) says that the complainant is no longer disabled for work by his injury. It relied on surveillance which shows the complainant working on cars and financial records which do not show a significant change to the income of the business.

The insured lodged a complainant with The Australian Financial Complaints Authority (AFCA) and said his wife was doing the work in the business, that the business made money selling parts and assets rather than mechanical work, and that the insurer should pay him benefits

AIA paid him total disability benefits until May 2019, when it said surveillance showed he was no longer unable to work.

After lodging a complaint, The Australian Financial Complaints Authority (AFCA) sided with the insurer, saying the insured’s explanation was “not convincing” and business records and surveillance indicated he was not totally disabled in the last half of 2019.

See the determination here.

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