In an unusual tactic, financial planner William Johns took his client’s life insurer to the Human Rights Commission (HRC) for an alleged breach of the Disability Discrimination Act — and won.
A client who had taken a recreational drug around ten years earlier, but who had not used since then, was given an additional loading of 50 per cent on the premiums quoted for income protection and total and permanent disability (TPD) cover through a major insurer.
“He was a young guy at the time, and is now a family man with children, one of them with a disability,” Johns says.
“What they’re saying is that under the Disability Discrimination Act, it’s clear that insurance companies have an exemption, but they have to rely on actuarial, statistical data … to say that ‘this person’s a risk and we can discriminate against them’.”
“But they have to provide, at call, the evidence on which they relied. But [in this case] there is no evidence that there’s any long-term impact, yet they still discriminate.”
Johns is the managing director of Health & Finance Integrated, a western Sydney-based financial planning practice that specialises in advising people with disability and their families.
He believes there could be many more cases like this, where insurers have unfairly loaded up clients’ premiums without any justifiable reason to do so.
“At the moment, I think advisers are being bullied by insurance companies, so if they make a determination, we just accept it, we can’t argue against it,” Johns says.
“But the insurance companies know that they can actually turn around — and the HRC is nothing but arbitration; the next step is the courts, and they know that most people won’t go to court.”
Imputed disability
To set loadings on premiums, insurers use “imputed disability”, which means that by virtue of what someone did in the past, they can in some cases assume they will have a disability in the future.
“Whether you have [the disability] now, or not, is irrelevant; they penalise you based on what could or could not happen in the future,” Johns says.
“I’m not beating up on insurance companies, but I’m saying we should all as a collective sit down, work together and try to understand the different systems.
“As advisers, we should have faith that we’re not discriminating against our clients by applying what the insurer wants. At the very least, when something doesn’t feel right, call the Human Rights Commission and ask.”
Johns says the insurer told him this was the first time they had ever received a letter based on the Disability Discrimination Act.
“No one questions it,” he says.
“We want advisers, as the client’s agent, pursuing the best interests of the client.
“But we’re not trained in this way. A finance degree doesn’t educate you on disability and discrimination, but they’re all systems that we need to be aware of.”
Driven by personal hardships
Johns has built his entire practice around assisting people with disability and chronic illness, along with those moving into aged care.
He was inspired to enter this area through his own family background: his mother has multiple sclerosis, and he had been her carer for a long time.
“Centrelink wouldn’t give us the right payments, appropriate housing wasn’t affordable — we struggled as a family,” Johns says.
So when he made the decision to pursue financial planning as a career — after initially being interested in studying medicine or an allied field — he decided to focus on helping people suffering under similar hardships.
“The systems keep changing, the goalposts keep moving, different governments come up with different policies,” he says.
“Every time there is a change in policy, it impacts so many people that are receiving benefits.”
Complex health care systems
As well as providing holistic financial advice on investment, superannuation and life insurance, Health & Finance Integrated assists its clients to navigate Australia’s complex health care systems. These differ markedly between states and territories, with some areas covered by federal policies and ministerial portfolios, and others by states.
In addition to obtaining his financial planning qualifications through a Bachelor of Business (Applied Finance) and his CFP designation, Johns also holds a Master of Disability Studies.
“I think I’m one of the only advisers with that sort of qualification — though I’d love to see others become more interested in this,” he says.