Insurer spent years trying to avoid paying a nurse benefits - and even hired a private investigator to follow her

TAL spent several years trying to find any way possible to stop paying a customer's insurance benefits, the banking royal commission heard today.

The insurer paid a private investigator $20,000 to follow the woman and fought her successful complaints to an ombudsman, repeatedly trying to cancel her income protection insurance cover.

The woman made a claim in 2010 after an anxiety disorder meant she could no longer work as a nurse.

He said the woman's level of suspicioun, feelings of oppression, loss of trust and social withdrawal had worsened considerably and she was permanently unfit for work.

TAL executive Loraine van Eeden today accepted the insurer's treatment of the woman over the past eight years had caused her considerable distress.

But TAL's claims general manager said she could not comment on whether it exacerbated the woman's medical condition.

The inquiry heard TAL tried at any point possible to find a way to stop paying the woman her benefits.

She continues to be paid benefits under her income protection policy but that is up for review this month.

The commission also heard TAL cancelled a different customer's income protection cover after she was diagnosed with cervical cancer, saying she failed to disclose a prior history of depression.