HCF Life Misled Group Super Members: Why Personal Insurance Advice Matters

HCF Life has been fined $750,000 by the Federal Court for misleading conduct relating to pre-existing condition clauses in its “Recover” insurance products, often issued through group superannuation cover.

The court found HCF Life’s policies allowed them to deny claims if a medical practitioner later concluded that symptoms existed before the policy began - even if the customer had no diagnosis or knowledge of the condition. In some cases, the customer wasn’t even aware they had a health issue, and a reasonable person wouldn’t have been either.

These policies were marketed to members through group superannuation without sufficient clarity, leaving insured members unknowingly exposed to potential denial of cover when they needed it most.

Justice Jackman ruled that the terms, while not intentionally misleading, were “objectively serious” in their impact. ASIC deputy chair Sarah Court noted that the ruling sends a clear message to insurers: policy wording must be transparent and consistent with the Insurance Contracts Act.

This case highlights the dangers of relying on generic group super insurance. Unlike tailored advice from a financial adviser, group cover often lacks clarity and flexibility. With adviser-led insurance, consumers can better understand the limits and conditions of their policy - helping avoid situations like this.