Tower Life to pay out on funeral plan
</B>Tower Life has committed to paying nearly $250,000 to 42 families previously denied claims on a funeral plan product, following an Australian Securities and Investment Commission (ASIC) ruling.
ASIC chairman David Knott says the funeral plan product, sold by Tower agent Australian InsuranceLine, had been advertised in a potentially misleading way.
"The ads claimed 'guaranteed acceptance, no strings attached, no fine print, no exceptions'. In fact there were significant exceptions," he says.
ASIC says some of the printed promotions ran by Tower between February 7, 1999 and October 2000 failed to make clear that the funeral policy excluded payment after death from causes other than accidental death, such as an illness, in the first 12 months and suicide in the first 13 months.
"We wanted to ensure that the 42 affected families who tried to make a claim on the policy after the death of a family member would have those claims met," Knott says.
ASIC's move has brought a commitment by Tower Life to pay out all benefits where a claim under the funeral policy was rejected because of the exclusions arising from that advertising.
Full disclosure of all relevant information is an issue ASIC is pursuing vigorously, Knott says.
"Industry participants must be prepared to take a hard look at their advertising material and compliance systems," he said.
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