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ASIC released a report on Thursday 30 August 2018 of direct life insurance that found high cancellation rates and poor claims outcomes.  The review of direct life insurance sales has found that sales practices and product design are leading to poor consumer outcomes. ASIC’s Report 587 released today reveals that:

Consumers are cancelling their policies in very high numbers:

1. one in five of all policies taken out were cancelled in the cooling off period
2. one in four of all policies that remained in force beyond the cooling off period were cancelled within 12 months
3. three in five of all policies sold were cancelled within three years.
4. life insurance sold direct compares poorly with other channels when it comes to claims: 15% of claims are declined, with 27% of claims withdrawn.

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