Burial society refuses to pay out

Burial societies are highly regarded and trusted by most black people for funeral expenses, however, their trustworthiness and dependence is slowly diminishing as they often fail to meet their financial obligations in times of need.

Their failure to act often adds more pain and misery to the grieving families.

Kholiswa Rotya, 43, from Makhaza, Khayelitsha, can testify to that experience.

She is crying foul after Khanyisa Burial Society refused to pay out when her grandfather, Puza Mtshotana, died in July this year. It is alleged that the society declined to pay because he was “over age”.

The 86-year-old died a year after joining the society as one of Ms Rotya’s beneficiaries.

Ms Rotya and her beneficiaries had been transferred from Intsebenziswano Burial Society because Mr Mtshotana was listed as a beneficiary by two individuals. While he appeared under Ms Rotya, she also appeared under Novelile Mzola, Ms Rotya’s mother.

Ms Rotya said she had been a member of Intsebenziswano since 2014, but was forced to shift to Khanyisa when Intsebenziswano joined a leading life insurance company, in 2016. Apparently her grandfather could not be listed under two people.

At the time she said the society indicated that the two organisations were linked and there would be no problems for transferred members.

A year after joining the society and paying monthly instalments of R170 and R190, Ms Rotya said her grandfather passed away in July. It was only when she went to submit a claim that she was informed that he was “removed” from the books because of age.

She said she was told the organisation only registered beneficiaries up to 84 years.

However, Mr Mtshotana was already 85 when Ms Rotya joined Khanyisa.

Ms Rotya said she was puzzled by the turn of events. She blamed the society for cheating her, questioning reasons for registering someone and later claiming he was over age.

She said a few months before the passing of Mr Mtshotana, he still appeared on her list of beneficiaries.

“When I came to put the claim, they said he was removed because of his age,” she said. But she said the decision to remove him was never communicated to them.

She said the society claimed to have sent her an SMS. “I am very disappointed. Why did they register him in the first place if he was over age,” she said.

“They just don’t want to pay.” Ms Rotya said the refusal to pay affected the family’s funeral arrangements.

“They blatantly refused to pay,” she said, adding they had to find alternative ways to conduct a decent funeral.

Chairperson of the society, Mzukisi Masana, said in terms of their constitution Mr Mtshotana was above the correct age limit. He said although he was 84 when he registered with the society, he was removed when he turned 85, in line with their constitution.

He said Ms Rotya was notified of the change through an SMS, but she denied getting the message. “There is nothing we can do, we treat our people equally. Our members have the responsibility to check and update their policies or beneficiary lists, as well as their details. We do not have the responsibility to follow up with members. It is up to members to follow up,” said Mr Masana.

He said SMSes have successfully been used by the society to communicate with members for more than two years and they have not had any problems. “We encourage our members to inform the office whenever they change their numbers so that they are kept informed,” he said.

Deputy Ombudsman for Long Term Insurance, Jennifer Preiss, said Khanyisa did not appear on their records and they could not do anything.

She said their office was only able to intervene when such schemes were “underwritten” by an insurer.

“If there is no insurer it means they are more or less on their own,” she said.

Ms Preiss urged people to ensure that there was “accountability” before signing up with any scheme.

She said most burial societies worked “very well”, but there were some who operated outside the law, and that caused a lot of difficulty for members.

She said the company should be investigated by the Financial Services Board (FSB) for compliance with the law.

* The following guidelines are from the Long Term Insurance Ombudsman to follow when buying funeral insurance:

* If you are buying a funeral policy from a salesperson always make sure that the person has a licence from the FSB to sell insurance. Ask the person to show you their licence.

* Make sure that you know who the insurer is. Funeral policies are often administered and sold by third party funeral administrators. It is important to know who the insurer is who underwrites the risk.

* If there is an application form, fill it in yourself. Make sure you read everything on the form including the fine print above your signature.

* If there are any questions or declarations about your own or any other life assured’s health, make sure that you disclose all the important information.

* When you claim and the insurer finds out that you did not disclose material information on the form, it could cancel the policy and not pay the claim.

* You must be sent a policy or a policy summary when your application is accepted. Insist on seeing the document. Read it and make sure you understand it. If not, phone and find out what it means.

* You have a 30-day “cooling-off” period after you receive the policy or summary to cancel the policy if you are not satisfied.

* Make sure that your premiums are paid every month on time. It is your responsibility, even if you are paying by debit order or stop order. Keep proof of payment. If the premium is not paid the policy may be terminated and a claim may be refused. There is a grace period (15 days or longer depending on the policy) after the due date when cover continues, but after that no benefits will be paid.

* If you have any dealings with a salesperson, the administrator or the insurer, keep written proof of the dealings.

* Make sure that any beneficiary nominations (where you nominate the name of the person who must receive the benefits on your death) are up to date and still reflect your wishes.

* When a life assured (the person covered by the policy) dies, the claimant must submit the claim as soon as possible. Check in the policy how much time there is for a claim. If the claim is late the insurer can refuse to pay the claim.

If a claim is refused for any reason the insurer or administrator must give you the reasons in writing.

The Ombudsman for Long Term Insurance resolves disputes between subscribing insurers and policyholders. If you are not able to resolve a complaint with an insurer then you can write to them on info@ombud.co.za