Life Ombud: Late submission of claims

BACKGROUND

The life assured, who was murdered, held a funeral policy which provided that

“The claim must be submitted within 12 months from the date of death”.

The complainant, his wife, was the named beneficiary, and she lodged a death claim some 21 months after the murder. The insurer declined the claim on the basis of late submission.

The complainant contended that the reason for the delay was beyond her control. She and another had been formally charged with having murdered the life assured. She had been continuously detained from shortly after the life assured’s death and after a lengthy trial she was acquitted and released, while her co-accused was convicted of the murder.

She lodged the claim with the insurer promptly after the trial was concluded.

CONSIDERATION

In the light of the unique circumstances surrounding the delay in lodging the claim, as outlined above, we invited the insurer to reconsider its decision, taking equity/fairness into account.

RESULT

In response thereto the insurer’s claims committee decided to waive the defence of late submission and assessed the claim on its merits. It met the claim in full.

CAUTION TO POLICYHOLDERS

It is important for policyholders to ensure that beneficiaries/executors of deceased estates know where policies are kept and what the claim procedures are so that claims can be submitted on time.

The courts have confirmed insurers’ right to enforce time barring clauses and our office can only exercise our equity jurisdiction in favour of a complainant if there is good reason to do so. It would therefore be prudent for claims to be submitted to the insurer on time.