Mak­ing sure your life pol­icy pays out

New tech­nol­ogy re­duces fraud, speeds up claim pro­cesses and can even help un­cover un­claimed death ben­e­fits, but you need to make sure your de­tails are up to date, writes

CityPress - - Business -

Some life in­sur­ers, like FNB Life, are ac­cess­ing the Na­tional Pop­u­la­tion Reg­is­ter to im­prove the speed at which fu­neral and death claims are pro­cessed.

Tech­nol­ogy now al­lows a life in­sur­ance com­pany or bank to ver­ify if some­one has died by sim­ply typ­ing their iden­tity num­ber into the registry.

Nkaz­imulo Sokhulu, chief op­er­at­ing of­fi­cer at FNB Life, says this tech­nol­ogy has al­lowed FNB Life to pay out 50% of the claims within 24 hours of re­ceiv­ing the call and has re­moved the need to pro­duce a death cer­tifi­cate.

It has also re­duced the num­ber of cases of fraud­u­lent claims be­cause the death can be ver­i­fied through the depart­ment of home affairs in a mat­ter of min­utes.

Al­though FNB Life does not re­quire a death cer­tifi­cate to process the claim, they do re­quire the BI-1663 form that would have been com­pleted by the med­i­cal pro­fes­sional to cer­tify some­one as de­ceased. The BI-1663 form is also re­quired by the Depart­ment of Home Affairs in or­der to reg­is­ter some­one as de­ceased be­fore is­su­ing a death cer­tifi­cate. Queries by City Press to other in­sur­ers sug­gest that for other in­sur­ers a death cer­tifi­cate is still re­quired.

FNB Life has taken the new tech­nol­ogy a step fur­ther and is ac­tively min­ing the registry to find recorded deaths of its clients. Sokhulu says they have iden­ti­fied more than 2 000 cases (with a com­bined pay­out of R2 mil­lion) where clients have died but no one has claimed the ben­e­fits. The prob­lem is that in most of th­ese cases, there are no ben­e­fi­ciary or con­tact de­tails for the client. FNB has a team ac­tively search­ing for ben­e­fi­cia­ries or next of kin, yet to date only about 150 (R300 000 worth of claims) of th­ese ben­e­fi­cia­ries have been found.

FNB is now on a drive to con­nect with ex­ist­ing pol­i­cy­hold­ers to en­sure ben­e­fi­ciary de­tails are in­cluded, and high­lights the im­por­tance of en­sur­ing that you name ben­e­fi­cia­ries on your poli­cies and keep your in­for­ma­tion up to date – there is no point in hav­ing a pol­icy that can­not be paid out. Fur­ther­more, if there are no named ben­e­fi­cia­ries on a fu­neral pol­icy, the money has to be paid into the es­tate and may not nec­es­sar­ily be used to pay for the fu­neral.

In 2014, life in­sur­ers re­ported a steep in­crease in the num­ber of fraud­u­lent and

Maya Fisher-French dis­hon­est long-term in­sur­ance claims – 8 306 cases were un­cov­ered com­pared with 4 690 in 2013. Of th­ese, 3 619 re­lated to the pro­vi­sion of false doc­u­men­ta­tion.

Ac­cord­ing to the As­so­ci­a­tion for Sav­ings and In­vest­ment SA (Asisa), in­sur­ance fraud syn­di­cates op­er­ate mainly in the de­vel­op­ing mar­ket and the ma­jor­ity of fraud­u­lent-claims cases have been un­cov­ered in KwaZulu-Na­tal and the East­ern Cape.

To com­mit the fraud, the syn­di­cate just re­quires the vic­tim’s name and iden­tity num­ber. Ac­cord­ing to Asisa, “ei­ther a client has an ex­ist­ing pol­icy with an in­surer and the syn­di­cate sub­mits a fraud­u­lent death claim with­out the client’s knowl­edge, or the syn­di­cate takes out a life or fu­neral pol­icy on this per­son’s life and pays the re­quired pre­mi­ums for the wait­ing pe­riod of the pol­icy”.

“Once the wait­ing pe­riod is over, the syn­di­cate will pro­duce a body or a fraud­u­lent death cer­tifi­cate, and claim the death or fu­neral ben­e­fit.

“Usu­ally, th­ese syn­di­cates re­ceive tip-offs from mor­tu­ary staff or pri­vate fu­neral par­lours when the next of kin does not iden­tify an un­known body within a rea­son­able pe­riod of time, or when a badly burnt or mu­ti­lated body is dif­fi­cult to iden­tify. A fraud­u­lent death cer­tifi­cate is then is­sued and a claim is made.”

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