With the rise of funeral cover scams, consumers must be more wary than ever before to make sure their money and families are protected, warns Darryl Dunn, Liberty Head for Market Development and Worksite Management.
In South Africa, there is culture of respecting the dignity of a loved one by spending a lot of money on funeral costs which is why consumers turn to funeral covers to take care of the costs related to a funeral.
Metropolitan estimates that South Africans spend a minimum of R23 500 to a maximum over R120 000 on funeral costs excluding the cost of catering, flowers, and tombstones.
Dunn said: ”There are individuals and unaccredited businesses who are taking advantage of consumers who are trying to protect themselves and their earnings.“
The Association for Savings and Investment South Africa (ASISA) has warned policyholders and investors to expect a new wave of phishing attempts, and criminal fraud scams following the Transunion South Africa data breach earlier this year.
With these scams, members of illegitimate funeral cover schemes pay the monthly premium to the owner of the company, but when they lodge a claim, the client never receives the pay out.
Dunn shares how consumers can avoid these scams and find the right funeral cover:
Do your research
Consumers must do their research online using reliable and credible platforms to check the stability of the financial services provider as well as look for reviews by other customers about the company.
Also, check for media reports on the company to see whether there are negative news about their conduct or an online presence at all.
“Ensure that the person selling you funeral cover is an authorised financial services provider (FSP) registered and granted a license by the Financial Sector Conduct Authority (FSCA) in terms of section 8 of the Financial Advisory and Intermediary Services Act, 2002, and that your funeral policy is underwritten by a licenced insurer,” Dunn said.
All insurers have to be registered and granted a license by the Prudential Authority.
Dunn recommends visiting the FSCA website (www.fsca.co.za) for a helpful funeral insurance tip sheet.
Funeral cover claims should be simple and effective
Dunn said that it’s important that you consult with a financial adviser because they can offer options that work with your finances.
Dunn said, “They will help you find the cover that is relevant to your needs and ensures (that) you will always be adequately covered. They are also able to explain the benefits to you, the claiming process and any relevant terms that you may not understand.”
According to Dunn, when claiming from your funeral cover the illegal schemes will often make you wait for weeks and not take your calls.
“If you’re working with a registered FSP, they should be accessible and be able to advise on the claims process and how long the claim would take to process.”
Check your accounts for the first signs of fraud
By reviewing your bank statements on a regular basis, you will notice any suspicious debit orders from companies that you don’t deal with. If you see a suspicious debit order, immediately contact your bank.
If you spot deductions on your work payslip that seem fishy, contact your Human Resources department immediately.
“If you’re still not having any luck, you can always report suspected fraud to the police,” Dunn said.
Keep an eye on your policy
According to Dunn, it's important to review your funeral cover annually to make sure it is still sufficient to cover your needs.
Dunn said that starting a family, for example, means you may want to add your spouse and children to your funeral cover
“It is a good idea to review your budget each year and to make sure to not lapse in payments if you’re facing financial difficulty. Rather, speak with your insurer and check if you can reduce cover amounts instead of cancelling the cover in total. There are usually ways to make it manageable,” Dunn said.
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