FREQUENTLY ASKED QUESTIONS WITH REGARDS TO INSURANCE PRODUCTS SUCH AS FUNERAL POLICIES:
1. What should consumers be on the lookout for when buying insurance products providing funeral benefits?
Consumers should ensure that they buy such products from reputable and registered entities or individuals. The intermediary selling the product should be a licensed financial services provider (FSP) in terms of the Financial Advisory and Intermediary Services Act (FAIS). The policy must always be UNDERWRITTEN by a licensed long-term insurer even if the provider of the product is an FSP such as a funeral parlour. Consumers should ensure that the product(s) they buy address their needs and that they can afford insurance products that they buy. Non-payment of premiums (even if it is missing one month’s premium) may adversely affect the consumer or the benefits payable in that the policy may lapse.
2. What is a policy contract?
A policy contract is a legal document issued by the insurance company containing details of benefits, premiums, terms and conditions and a policy number.
3. Am I entitled to a copy of the policy?
If you enter into a policy you must be provided with a summary of the policy or, upon request, with a copy of the policy contract.
4. When is my premium payable?
Insurance premiums are normally paid on a monthly basis. You need to agree with your financial advisor or the insurance agent (the person selling you the policy) on the date when you must pay the premium – this agreed date should be stipulated in the policy document. It is also your responsibility to inform the insurance company if you want to change the date on which the premium will be paid.
5. Can these premiums increase in the future?
Premiums on insurance policies normally increase with a certain percentage per year to keep track with inflation, as stipulated in the policy document. Premiums could also increase if there are too many claims under the policy, for example in the case of a group scheme policy. You need to confirm with the person selling you the policy when the premiums are expected to increase and this information should be clearly stipulated in your policy document.
6. Do I get a receipt if I pay the premium in cash?
Yes, it must be an official receipt stating the name, address and telephone number of the recipient, the policy number and the name of the long-term insurer on whose behalf the premium is received.
7. How must I pay?
Most policies provide for premiums to be paid in cash through a debit order or a stop order. Make sure you understand how you must pay your premium. It is your duty to make sure that there is money in your bank account on the agreed date for the premium to be paid.
8. When does my cover start?
There may be waiting periods in the policy which will be shown in your policy document.
9. What is the waiting period?
This is a period at the beginning of your cover when you will not be eligible for any policy benefits should death occur. Your policy document must indicate how long this period runs for. This will appear in the terms and conditions of the policy document.
10. Are there any exclusions?
These will appear in the terms and conditions of your policy document. Exclusions relate to conditions or diseases listed in the policy document which, if they result in the death of the life insured(s) (person(s) covered under the policy), no benefit will be paid. You should pay
special attention to the exclusions in the policy and check that the policy is appropriate to your needs. Policy exclusions tend to vary between the products of different insurers.
11. What happens if I miss a payment or stop paying?
You will no longer be covered and if you start paying again, the waiting periods and exclusions may be reapplied.
12. How do I claim in respect of a death?
The claims procedure must be given to you in detail in the terms and conditions of your policy.
13. Can I cancel my policy?
You may cancel your policy within 30 days of paying your first premium and receive a full refund if you have not claimed. Thereafter the policy can be cancelled at any time, but no premiums will be refunded.
For further information the FSB can be contacted on the following numbers:
0800 20 20 87 or 0800 11 04 43
P O Box 35655
Riverwalk Office Park, Block B
41 Matroosberg Road; Ashlea Gardens Ext 6; Menlo Park; 0081
Written by Loshini Govender
Community Relations Officer
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