FAIS ombud settles complaint on funeral policy that didn’t pay out
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The office of the Ombud for Financial Services Providers (FAIS Ombud) says it settled a complaint on a funeral policy where an insurance company refused to pay out.
The insurance company had rejected the claim because the complainant’s eldest son was over 21 and not a student.
According to the ombud, the complainant had a funeral policy with the respondent, a registered financial services provider.
“The policy had provided for a funeral benefit of R10 000 in respect of the complainant’s eldest son, who was born on June 19, 1999. The complainant’s son had passed away during March 2021 when he had already turned 21 years old,” it said.
The financial service provider rejected the claim. When the complainant was dissatisfied, she contacted the ombud’s office.
“She claimed that she had not been informed in the five years since the inception of the policy that dependants who reach the age of 21 are no longer covered unless they are full-time students under the age of 26,” the ombud’s office said.
The FAIS Ombud said it contacted the insurance company to find out why the claim was rejected.
“The respondent responded by stating that the deceased no longer qualified as a dependant child at the time of his death. The claim was therefore contractually unsuccessful. Furthermore, the respondent also referred to the fact that the complainant was provided with an annual yearly statement, which explains what the requirements are for a child to be considered a dependant child.
“It also states that as soon as the child is nearing the age of 21 that you should call the financial advisor to make arrangements for a new policy,” said the ombud.
The FAIS Ombud said the respondent proposed that the matter be dismissed as there were no reasonable prospects of success.
The ombud said the general code of conduct required that financial services providers take care of the interests of their clients and employ resources, procedures, and technological systems to prevent their clients from suffering risks and financial loss.
It said it asked the insurance company to consider the circumstances of this matter and why it didn’t have systems in place to prevent the matter to occur again.
“In response, the respondent confirmed that its discretionary committee had agreed to consider the claim on the basis that the adult child was covered under an Extended Funeral Plan at the time of reaching age 21. As a result, the death value would be equal to an extended family member cover amount, less any premiums that should have been paid at the date of death,” it said.
The complainant accepted the offer.
The ombud said should you believe you have been financially prejudiced as a result of the financial service rendered to you, you may submit a complaint in writing to [email protected], Fax: 012 348 3447 / 012 470 9097 or via post to PO Box 74571, Lynnwood Ridge, 0040.
Alternatively, they can submit a complaint via their website at www.faisombud.co.za or call their Client Care Centre on 012 762 5000 or Sharecall 086 066 3274 for assistance in submitting a complaint.