Home South African Relatives of virus victims suffer double blow as insurers decline payout claims

Relatives of virus victims suffer double blow as insurers decline payout claims


Over 240 complaints against insurers have been lodged with the long-term insurance ombudsman since the outbreak of Covid-19 in March last year.

Families have been given the run-around by funeral policy companies as they struggle to access payouts for loved ones that have died of Covid-19. Picture: Tracey Adams/ African News Agency (ANA)

Cape Town – News of people dying has become an everyday occurrence since the second wave of Covid-19 hit local shores last year.

With the virus rapidly spreading and nearly everyone affected by the loss of a loved one to the virus, many families are also burdened with the uncertainty of how they will bury their loved ones as accessing insurance policy payouts begins to be an uphill battle.

Over 240 complaints against insurers have been lodged with the long-term insurance ombudsman since the outbreak of Covid-19 in March last year.

Long-term insurance ombudsman spokesperson Denise Gabriels confirmed that 247 complaints had been lodged with the body over the 10-month period.

“There have been complaints against long-term insurers for not paying out claims during the Covid-19 pandemic.”

Referring specifically to Covid-19-related deaths, Gabriels said: “There have been 247 such complaints to date.”

She added that not all Covid-19-related claims were valid, or met the criteria for payouts, and this could be the reason for failed payouts.

“For example, a policy providing life cover only will not pay out a claim based on the life assured becoming unemployed as a result of Covid,” she said.

Xoliswa Ntshangana lost her father on Boxing Day last year. Two days later she visited Hollard’s Gugulethu branch where she submitted all required documentation for her claim to be processed. Ntshangana said when she first took out the policy she was advised that “there was no waiting period for Covid-19, and it is being treated as an accident, so as long as the first premium goes off, my father would be covered should he die of Covid,” she said.

Ntshangana was requested to provide a letter or document from a medical doctor proving that her father had succumbed to Covid-19, as well as lab results from her father’s initial Covid-19 test.

“Although I found the requested documents very strange, I went out and made sure I got them all. After having submitted all the documents, they then told me that my claim had been declined due to the waiting period,” added the frustrated woman, who had covered her 71-year-old father for R20 000.

Gabriels could not provide comment on specific individual cases, but advised that Ntshangana lodge a case with the ombudsman.

Similarly, Michael Sigidi said he had had problems with Hollard after his twin sister passed away. Sigidi said he had been paying a premium in excess of R800 a month.

“I had covered myself and my sister and had been paying for over a year. I missed one premium, and that was the reason I was given for the claim being declined. They said it was because there was that one premium missing, I could not get the R75 000 payout for my sister,” he said.

Hollard spokesperson Warwick Bloom said the insurer had waived the waiting period for deaths from Covid-19 for the first R15 000 of funeral benefits, subject to a standard 6-month waiting period.

“Any insured person dying from Covid-19 within the 6-month natural causes waiting period would be paid the lesser of their actual cover and R15 000. Covid-19 deaths would be treated differently to what is generally termed ”natural causes’. We introduced this exception as a response to the pandemic.“

Bloom added that Hollard would be in contact with Sigidi as a matter of urgency to resolve his query.

“I can say with certainty that we definitely do not decline claims based on a single unpaid premium – we have very strict controls in place to ensure that policies lapse only after a minimum of two consecutive premiums have been missed,” said Bloom.

Nompumelelo Mtsi has also been waiting for her husband’s funeral policy payout from Old Mutual since her husband passed away in June last year. Mtsi said the insurer had promised that her claim would be processed in time for the funeral, but to no avail.

“I kept going back to their offices and getting the run-around. I still owe the undertaker money, and many other expenses that I incurred as a result of the money not being paid out,” she said.

“I am really at a loss and am struggling to keep my head above water because of the debt this has left me with,” Mtsi concluded.

Old Mutual chief communications officer Tabby Tsengiwe said the accusation tabled by Mtsi were false and deeply hurtful to their brand.

“Our team called Mrs Mtsi recently to verify and conduct due diligence on the matter. We would like to state on record that Mrs Mtsi’s husband did not have a funeral policy with us, but rather an endowment plan and Mrs Mtsi was not the beneficiary. We can confirm that the policy was paid out to the nominated beneficiary in July 2020 and Mrs Mtsi was aware that she was not the beneficiary, as she had documentation stating this,“ she said.

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