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False Claims and Staged Deaths As Funeral Fraud Increases
False Claims and Staged Deaths As Funeral Fraud Increases
27 Sep 2021

From staged deaths and, buying dead bodies to beneficiaries involved in fraudulent claims has caused a 12% increase in dishonest and fraudulent funeral claims costing R587.3 million.

As more people face pressing economic situations, it has also made it more tempting for syndicates and people to place fraudulent claims to get access to the quick payout that comes with funeral payouts.

 

Pandemic causes significant rise in fraudulent claims

Being prepared financially is something that not many South African's are, especially when it comes to unexpected expenses that can end up taking a huge chunk from already strained finances. Having a funeral policy is just one of the ways in which people choose to help their loved ones shoulder the cost of a funeral, especially in a time of a  pandemic where we find ourselves in. 

 

With the rising number of deaths related to the pandemic, insurers have also noted an increase in fraudulent claims. According to the Association for Savings and Investment South Africa (ASISA), there were 3 186 instances of fraudulent claims to the value of R587.3 million, an increase from the 2 837 fraudulent and dishonest claims in the previous year with funeral insurance taking the biggest hit. 

 

Not only are syndicates becoming more creative in finding ways to cash in on funeral policies through fraudulent claims, but people are also using extreme means to cash in on policies. Some of the examples ASISA has noted that people use to access the payout in funeral policies are: 

 

  • Hit and run crimes by placing a dead body on the road to be run over before having it checked into a morgue. 
  • Buying dead bodies from mortuary employees to be used by syndicates to place a claim. 
  • Using personal information of addicts and vulnerable people in poor communities by offering them 'jobs' and having them fill out applications with their personal information.
  • Being dishonest about existing medical/health conditions or hiding how severe a condition is.

 

Avoid being guilty of non-disclosure

When taking out any policy, honesty is the best policy to avoid having the omitted information come back to haunt you when it's time to place a claim. There are instances where someone can be guilty of non-disclosure. But what does this mean? Leaving out important information that can affect your policy by mistake or on purpose is known as non-disclosure.

 

For example, not fully disclosing that you have a health condition that puts your life at risk could be seen as being guilty of non-disclosure. To avoid being guilty of non-disclosure you must make sure that all information supplied to an insurer on behalf of the policyholder or any person, covered under this policy must be true and complete.

 

It remains the policyholder's responsibility to make sure that the information provided is correct. If you find yourself unsure or unable to understand what is being asked of you, ask that the question or information be repeated and explained.

 

Having your information protected

All insurers are held accountable through the POPI Act which ensures that you are made aware of what information is retained and how it will be used to decrease fraudulent use of your data. It is also created to protect you.

 

As much as insurers do everything in their power to protect your information from being misused, it is crucial that you avoid sharing personal information on public platforms or sharing them with an insurance company that is not a registered Financial Service Provider (FSP).

Need more information on MiWayLife? Read about our life insurance product, or get a life insurance quote in 30 seconds. Alternatively, call us on 0860 64 54 33 .
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Terms and conditions apply. Eligibility, cover and benefits are determined on individual risk profile. MiWayLife is an authorised FSP (No. 45741) and its product offering is underwritten by Sanlam Life Insurance Limited, a registered long-term insurer. MiWayLife is a division of Sanlam Life Insurance Limited - Reg No. 1998/021121/06