MetLife Declined To Pay Claim

Amanda Dunn thought her family was covered if the worst happened. Her husband, Roger, had a congenital heart condition and after surgery as an infant, he went on to lead a full and active life. But the threat was always there. So, like hundreds of thousands of Australians, they took out a life insurance policy after having their two daughters. 

"That was the whole reason we took out the insurance — to be covered for the house and for our future, and for the girls' future in case something did happen," Ms Dunn told the ABC. 

They purchased joint MetLife policies through ALI Group when they refinanced the mortgage on their home. The couple disclosed Mr Dunn's heart condition and, for almost a decade, the couple paid their premiums believing they were fully covered. 

But in 2013, Mr Dunn developed pulmonary hypertension, his health rapidly deteriorated and he could not work. 

Facing significant financial hardship, the family submitted a claim for total permanent disability (TPD). They were stunned when they received a letter from MetLife in 2015, stating Mr Dunn did not qualify for a payout. 

"It was rejected based on grounds that he wasn't sick enough to claim for it, so we went back and forth to the doctor who filled out all the medical forms and he still wasn't sick enough to claim for TPD," Ms Dunn said.

"He was very ill; he had to walk with oxygen and he couldn't shower because all his veins were quite protruded, and they would bleed so he would have to wrap them up in bandages.

He couldn't work obviously, and he didn't have much of a quality of life."

MetLife then rejected another claim on the basis Mr Dunn's condition was pre-existing, despite explicit advice from a cardiologist that pulmonary hypertension was a "separate problem" that was not linked to his congenital heart disease.

With Mr Dunn unable to work, Ms Dunn had to continue her job as a teacher to bring in money, rather than stay home and care for him.

"I was very upset because I think our family was under enough pressure. I had to work more and have less family time with the girls," Ms Dunn said.

"[Our family] were putting on that parental role as well, of being the other parent, and looking after [Roger] while I was still working and trying to keep everything going."

Days before Mr Dunn passed away, MetLife again rejected their claim for TPD.

"He was exhausted. I think the phone call on the Monday that said the TPD had been rejected, I think that was it," Ms Dunn said.

"I think he'd given up hope and he couldn't fight anymore, and he was so weak. The last thing he said to me was 'thank you for being such a beautiful wife and mother to my children'. And I kind of knew then that was it."

Second claim rejected by MetLife - Mr Dunn died in hospital following a series of medical complications leading to renal failure and cardiac arrest.

Then the Dunn family suffered yet another blow: MetLife rejected a separate claim for life insurance. The company said under its policy, pulmonary hypertension was considered a pre-existing condition and therefore could not be claimed upon.

Ms Dunn has vowed to continue fighting for her husband's life insurance payout. 

"I know it would have been important to Roger because I've got life insurance, and I'd expect that to be paid out to my girls if something did happen to me," she said.

In a statement to the ABC, MetLife said it could not comment specifically on the Dunns' case.

However, the company said customers needed to consider whether the terms and conditions of their policy were appropriate for their needs.

"A pre-existing condition exclusion relates to a condition the customer had suffered from prior to the commencement of the insurance. The customer would be eligible for other conditions covered by the policy, which are not pre-existing," the company said.

"Each claim is assessed on its merit and the decision to decline a claim is considered very carefully, based on the available evidence."

Lawyer Paula Shelton from Adviceline Injury Lawyers has taken on Ms Dunn's case.

"Unfortunately I think Amanda's situation really epitomises what has gone wrong with life insurance claims," Ms Shelton told the ABC.

"She and Roger took out this policy, planning that they would be covered if the worst happens — I mean that's what insurance is for. They disclosed the condition that existed. Unfortunately Roger suffered a rare condition — a new condition — yet poor Amanda has been left without the type of support she was entitled to expect."

Ms Shelton said the Dunns should not have been sold a policy that did not suit their needs.

"I would hope that the royal commission would look into all those circumstances, particularly in respect of pre-existing conditions and denial of policies based on them," Ms Shelton said. 

Certainly just accepting the client's money was not appropriate in this circumstance.

"We know that it's a complicated matter to assess a pulmonary and a cardiac condition —there were a number of things that were available to the insurance company to do.

"They could have got an authority from Roger and got information from his general practitioner, and his specialist about his condition," Ms Shelton said.

Consumer groups want change - Ms Dunn's decision to share her story comes as the insurance industry is set to be grilled as part of the next round of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Consumer groups have long been calling for changes to life insurance.

Ahead of the next round of royal commission hearings, the corporate regulator, the Australian Securities and Investments Commission (ASIC), released a report slamming the industry for its high-pressure sales tactics.

ASIC's report also said sales practices often led to "poor consumer outcomes", with customers struggling to understand complex products.

Alexandra Kelly from the Financial Rights Legal Centre said consumers often had a poor understanding of key exclusions.

"Some of the fundamental changes we'd like to see is a disclosure of what the consumer has actually purchased," she told the ABC.

"Current product disclosure statements can run up to 100 pages, have lots of cross-referencing and include products that they can't even claim on.

"So we'd like to see tailored information directed at the consumer."