Sudden cancellation of life and illness policies - consumer warrior advice

Wendy Knowler, consumer Ninja, has a horror story about insurance policies being cancelled - by sms.

Wendy Knowler, consumer journalist, this week has a horror story of the life insurance industry.

It involves mostly elderly customers with health issues who have been paying premiums for years - who suddenly got an sms saying ''from the end of March you won't have this cover''.

The message said 'Don't be alarmed'. That was the part that got me! I mean - you've just been paying paying premiums for seven or eight years and you won't be getting them back.

Prime Meridian Direct sold these policies. The most problematic one is Prime Living Cover Growth, sold mainly to older people with health issues who could not get cover anywhere else - life cover and for terminal illnesses.

Wendy Knowler, consumer journalist

There was a three-year waiting period before they could claim for illnesses. Just as those waiting periods were coming to an end, and that cover benefit has grown quite nicely, then the rug gets pulled by Constantia insurance, who was underwriting the policies.

Wendy Knowler, consumer journalist

Listen to the entire horror story about the insurance policy and how it panned out, below.

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