Are you really protected by your TPD or Life Insurance policy?

Friendly Societies vs Insurers: what’s the difference?

Both Friendly Societies and traditional insurers offer life-related products, but they operate under very different legal frameworks.

Traditional insurers are covered by the Insurance Contracts Act 1984 (ICA), which gives you key legal protections and clear disclosure obligations.

Friendly Societies, however, are governed by the Life Insurance Act 1995. Their products might not be classed as “insurance contracts” under the ICA, even if the cover looks similar.

Because branding and documentation can look almost identical, many people assume they’re dealing with a regulated insurer under the ICA. In some cases, this lack of clarity may even be misleading and possibly in breach of section 12DF of the ASIC Act 2001.

What protections does the ICA provide?

The ICA is designed to protect consumers by ensuring insurance contracts are transparent and fair. Under the ICA, insurers must:

• clearly outline what’s covered in your policy and what’s excluded
• handle claims fairly and efficiently
• avoid unfair contract terms
• comply with strict disclosure obligations
• offer cooling-off period and cancellation rights

These protections only apply to products issued as insurance contracts. Some Friendly Society products fall outside of this framework, leaving consumers without the same safeguards.

As a result, we’ve seen insurers assert that consumer protections from the ICA don’t apply to their products, often at the exact moment a consumer needs them most.

How to identify a Friendly Society insurance provider

The list below is APRA’s register of Friendly Societies (last updated 7 October 2025):

• Centuria Life Limited
• Foresters Financial Limited
• Futurity Investment Group Limited
• Generation Life Limited
• Australian Unity Life Bonds Limited
• KeyInvest Ltd
• Lifeplan Australia Friendly Society Limited
• NobleOak Life Limited
• Over Fifty Guardian Friendly Society Limited
• Sureplan Friendly Society Ltd

If your policy is issued by one of these organisations, the ICA may not apply in the way you expect.

What’s at risk with Friendly Society policies?

If you buy TPD, income protection, or Life Insurance from a Friendly Society, their products may be structured as investment products, not insurance contracts. That difference matters because if the ICA doesn’t apply, your rights can be significantly limited.

Some Friendly Societies (for example, NobleOak) also include clauses that may void your new policy if you don’t cancel an existing one – a risk many consumers are unaware of.

To protect yourself, always:

• wait until your new policy is officially accepted before cancelling your old one and get financial advice about the best insurance product for your circumstances
• read the Product Disclosure Statement (PDS) carefully
• ask for written confirmation if you’re unsure about anything

If your product isn’t covered by the ICA, you may have fewer rights if something goes wrong.

How to check your provider

• ask if the product is covered by the Insurance Contracts Act 1984 (ICA)
• look up the provider on the APRA register or life insurance companies and Friendly Societies
• review the PDS and ask questions if anything is unclear
• seek legal advice before you make a claim

Not all TPD, income protection, or life insurance policies give you the same rights. If you’re unsure whether your product is protected by the ICA, it’s important to seek legal advice before challenging a denied claim.

Rachael’s story: challenging a denied claim without ICA protections

In a recent County Court case against a Friendly Society, our client Rachael discovered just how different Friendly Society products can be.

After developing bipolar disorder, depression and anxiety, she lodged TPD and income protection claims with her Friendly Society provider. She assumed the ICA applied, but the Society alleged she failed to disclose her previous mental health history and attempted to void her claims.

Because the policy fell outside the ICA framework, Rachael wasn’t automatically entitled to the same consumer protections that traditional insurance customers rely on.

Our team uncovered key issues in the Society’s process, including no evidence that they were provided to our client before she applied for cover, inconsistencies in how the duty of disclosure descriptions were given when she applied for cover, some of which mirrored the wording of the duty of disclosure in the ICA, effectively extending certain ICA protections.

Despite the Friendly Society staunchly denying the TPD and income protection claims, we pursued court proceedings on Rachael’s behalf. The matter settled at at mediation for close to the full TPD benefit amount, which was well over $1,000,000.

This case underscores the importance of seeking legal advice when challenging a decision to deny your claim. There are important legal arguments that can be made successfully to yield positive outcomes for consumers that a Friendly Society may not accept at first instance.

Key tips for consumers

• don’t assume all policies provide the same consumer protections
• always read the PDS closely and ask questions
• seek advice urgently before challenging a rejected claim

Not all TPD, income protection, and life insurance products are created equal. Before you make a claim or challenge a decision, make sure you know what rights you have.

If your provider is a Friendly Society, check who’s issuing your cover, and take steps to protect yourself by getting legal advice before you lodge your claim and if/when you need to challenge the insurer’s decision, especially if the provider is a Friendly Society.

How we can help

Our dedicated superannuation and insurance lawyers are here to guide you and help you get the entitlements and compensation you deserve. Contact us today.