Massive commissions and an ultra-competitive workplace encouraged unscrupulous tactics at Freedom Insurance, according to an ex-employee.

Freedom came under scrutiny at the banking royal commission for selling an accidental death insurance policy to a young man with Down syndrome.

Preston Timmins worked at Freedom for five years and told the ABC he was not surprised when he heard the revelations.

"I've listened to sales myself where people were selling to people that didn't know they were taking out products, they didn't know they were taking insurance out," he said.

"They were told, 'Don't worry, you've got a cooling-off period', or, 'You've got the whole year to think about it because it's free'.

"Then come a year's time, if retention [staff] can't get a hold of them … [the payments] would just automatically start."

Mr Timmins was fired from Freedom Insurance for signing off on a recruitment commission for a woman who no longer worked at the company.

"I got terminated for a procedure I thought I was following by my upper management, but then got told no — they said it was serious misconduct," he said.

"It's not the reason why I'm speaking out … I've got good things to say about the company.

"[It started out] very professional, very family-orientated, it was just the whole listing onto the stock market, that's when it started getting a little bit too corporate and it changed the whole work dynamic."

Mr Timmins said the top sellers could earn $8,000 to $9,000 a fortnight in sales commissions, on top of their regular salary.

"It's a very competitive place to work, every single day there's a meeting in the morning, they call out the top sellers. People want to be in that list," he said.

"I don't know any other company that paid commission like Freedom did.

"You'd get paid your commission straight away so it didn't matter if you set up a dodgy policy, you're still going to get paid commission.

"I think that caused a problem as well because people realised that it doesn't matter."

In a statement, Freedom Insurance acknowledged the instances of unacceptable behaviour highlighted by the royal commission and apologised.

"We acknowledge we did not meet the standards expected of us and that to have any instance of failure to meet our regulatory obligations or community expectations is completely unacceptable," Freedom managing director Keith Cohen said.

Freedom said it had already implemented better training and increased monitoring of calls.

Freedom Insurance will be stopping sales commission from the end of this month and the Consumer Action Law Centre is calling for the rest of the industry to follow suit.

"We also think that commissions need to be substantially reformed, removed entirely, so any payments are for the benefit of the customer, not the salesperson," CEO Gerard Brody said.

"There's no reason to have sales commissions unless they are to just generate an incentive for sales people.

"From the royal commission, we can see what happens is that people get sold products that are junk, low value and in atrocious circumstances."

A spokesperson from the Financial Services Council (FSC) said the royal commission hearings should force life insurers to review their practices.

"The FSC expects that all life insurers and their distributors will be examining their sales processes and commission structures in light of recent testimony in the royal commission hearings.

"The Life Insurance Framework [LIF] reforms, which were strongly supported by the FSC and came into force on January 1, 2018, reduce conflicted remuneration in life insurance.

"ASIC has said it expects the changes to firms' incentive schemes as a result of LIF coming in to force will result in better consumer outcomes. The impact and appropriateness of the LIF will be the subject of an ASIC review in 2021.

"The second iteration of the FSC's Life Insurance Code of Practice, which will be released for extensive public consultation before the end of the year, will further enhance numerous consumer protections embedded in the existing code, including in relation to sales practices."