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Category Life Insurance

Understanding the terms and conditions of your funeral policy makes claiming easier

15 November 2021 Old Mutual
Rose Khutlang, Provincial General Manager at Old Mutual

Rose Khutlang, Provincial General Manager at Old Mutual

For many South Africans, celebrating the life of a loved one means providing a fitting send-off in the form of a dignified funeral. To make provisions for this, millions of people take out funeral policies to cover their immediate and extended families.

“While funeral cover is the country’s largest-selling insurance product, misunderstandings about the product’s terms, conditions and the claims process still exist,” says Rose Khutlang, Old Mutual Provincial General Manager.

“It’s important for funeral policyholders to make sure they read and understand all the terms and conditions that apply to the funeral policy to ensure there are no setbacks or delays when they claim.”

What do prospective policyholders need to know?

What people should be aware of when applying for a funeral policy is that the cover amount chosen can mean different rules applying to their policy. For example:
• Cover of up to R50 000 can be bought without answering any health and lifestyle questions or going for medical tests.
• For cover from R50 001 and above, some policies require that health and lifestyle questions be answered, even though no tests are needed.

Khutlang recommends that when signing up for funeral insurance, it’s important to answer all health and lifestyle questions truthfully and as comprehensively and accurately as possible.

“Failing to disclose an existing medical condition or a family history of a specific illness can result in the claim not being paid. It is better to be truthful and disclose everything upfront and pay a little more for cover than have the claim payment denied when money is desperately needed and your family is depending on the payout,” says Khutlang.

Other important things to know are that:

• Old Mutual Funeral cover that is R50, 000 or below is not underwritten (no medical tests or health related questions) has a waiting period of up to 6 months. This means a claim within this period cannot be honoured until the expiration of the waiting period. However, a policy with a cover of R50, 001 and above has no waiting period as cover in this band is generally underwritten.

• If you miss a premium payment on the date when it’s due, you will be given a 30-day grace period after which the policy is cancelled if no further payments are made. In some instances, customers may qualify for the premium holiday, in this case the cover remains active until the premium holiday benefit has been exhausted.

• Funeral policies do not function like a savings or investment product; if the policy is cancelled, there are no premium refunds.

• Old Mutual understands that times are tough, and finances are severely stretched so meeting payment obligations may become difficult especially in times of crisis or emergency. For this reason, Old Mutual allows a premium holiday of up to six months, where the policy and cover remain in place until premiums are paid again. However, if a policyholder does not pay for a seventh month the policy goes into a grace period and if the requirements to restart the policy are not met, the policy is cancelled.

• Some funeral policies allow cover to be extended to family members and spouses. In the event of a divorce, this cover may continue if the spouse was underwritten separately, and the policyholder chooses to keep their exes covered.

• To change beneficiaries, the policyholder must communicate with Old Mutual’s service centre or with their financial adviser.

• Important for parents in particular to note, is that when a biological, step or legally adopted child is an insured person on a family funeral policy, this cover will fall away after they turn 21 and are not a full-time student. These children no longer qualify for cover under the family funeral policy and an extended family funeral policy needs to be taken out to continue to cover them. For better understanding around this, please contact your financial services provider.

“At Old Mutual we understand that coping with grief and making arrangements for the burial of a loved one can be the most difficult thing to deal with. We are responsible to our customers and the communities we serve and are therefore exceptionally proud to be able to pay 95% of valid funeral claims within four hours if all claim documents and requirements are met.”

•“The best way to ensure that a claim is paid out without hassle and delay is by making sure that all terms and conditions are met, all documentation is correct and submitted timeously,” name Khutlang.

To further simplify the claims process, Old Mutual now offers policyholders the easy option of submitting claims online via the Old Mutual website, via WhatsApp or via USSD where claims can be submitted from a mobile phone within minutes. Support is available at the touch of a button.

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The second draft amendments to Regulation 28 will allow retirement funds to allocate up to 45% of their assets to SA infrastructure, with a further 10% for rest of Africa; but the equity & offshore caps remain unchanged. What are your thoughts on the proposal?

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