Bank­ing

Finweek English Edition - - MONEY -

Many South African con­sumers are overin­sured in terms of prod­ucts like f unera l cover, a FinS­cope study sug­gests. This 2013 st udy s et out t o be na­tiona l l y r ep­re­sen­ta­tive of cons umers’ per­cep­tions on f i nan­cia l ser­vices and is­sues. It re­veals that of those people who have fu­neral cover, the ma­jor­ity have at least t wo fu­neral cover prod­ucts.

It f ur­ther notes t hat t he t rend seems to lean to­wards hav­ing more than one t ype of fu­neral cover while a sig­nif icantly higher pro­por­tion of people who are burial so­ci­ety mem­bers also have a fu­neral pol­icy, ei­ther with a bank or in­sur­ance com­pany.

Vusi Mu­titi, a wealth man­ager at Inkunzi In­vest­ments, says that over the past few months they have been work­ing at re­solv­ing the overin­sur­ance is­sue of many of the clients they have brought on board.

“Many of these clients aren’t even aware that there are poli­cies that have been taken out on their be­half, some­times more than one from dif­fer­ent providers,” says Mu­titi. “Many people sim­ply do this as an in­vest­ment plan of some sort in that they ex­pect to get a pay­out when the in­sured has died.”

Mu­titi says this is preva­lent among the f inan­cially il­lit­er­ate com­mu­ni­ties.

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