Funeral insurance tops complaints to ombudsman for long-term insurance

Funeral insurance topped the list of complaints to the Ombudsman for Long-term Insurance in 2023 yet again, with 44% of complaints. The ombudsman succeeded to put R283 084 553 back in consumers’ pockets in 2023/

According to the annual report of the Ombudsman for Long-term Insurance (OLTI), funeral benefits remain the highest percentage of types of benefits consumers complain about. However, for the year under review this has declined from 48% in the previous year.

The percentages of complaints about credit life insurance and health benefits remained consistent for the past two years. However, the percentage of complaints about life policies increased the most, from 31% in 2022 to 34% in 2023.

Looking at the case studies included in the annual report, it becomes clear how careful you have to be when taking out long-term insurance and ensuring that your claim will be paid out.

Funeral benefit for your sister if she is not your sister

A consumer complained to OLTI that Emerald Life refused to pay out a funeral policy for her “sister”. Emerald declined the claim on the basis that the deceased was not the complainant’s biological sister. According to the insurer, there was therefore no insurable interest.

In terms of the policy, “extended family” has the following meaning: This refers to other family members nominated by the policyholder to be covered under this policy and in whom the policyholder has insurable interest. This will include the policyholder’s additional spouse(s), married or adult children, two parents, two parents-in-law and other relatives …

OLTI reviews ‘other relatives’ definition in funeral claim

According to OLTI it had to determine whether the deceased fell within the meaning of “other relatives”. The consumer said the deceased fell within the meaning of “other relatives”. She lost her mother at a very young age and the deceased’s mother raised her as her child. The complainant regarded the deceased as her sister.

The complainant’s version was corroborated by an affidavit deposed to by the deceased’s biological sister. In addition, the grandmother of the deceased and the great-grandmother of the consumer shared the same clan name. However, the insurer argued that the deceased did not fall within the meaning of “other relatives”.

The insurer said growing up with the deceased and/or the clan name connection was not sufficient for the deceased to qualify as other relatives.

OLTI took the case to a meeting of the adjudicators. It appeared that the consumer’s mother was a single parent. When she died, the complainant did not have a father or other guardian to care for her.

The evidence revealed that there was mutual affection between the consumer and the deceased’s mother. The meeting had no difficulty accepting the complainant’s version that the deceased’s mother raised her as her child and that she regarded the deceased as her sister.

It was also noted that the complainant’s son was an informant on the deceased’s death certificate. The meeting also considered the requirements of a customary law adoption. Although the deceased’s mother did not adopt the consumer in terms of the civil law, had the requirements of a valid adoption in terms of customary law not been met?

Meeting canvasses ubuntu in funeral claim

The meeting considered case law and also canvassed the concept of ubuntu in our law. They agreed that it would be against the spirit of ubuntu for the insurer to escape liability solely because the relationship/s in question had no biological aspect. If it was the insurer’s intention to require a biological connection, it should have made provision for it in the policy.

In a provisional ruling, the meeting unanimously decided that the insurer should admit the claim. If not on contractual grounds, then on equitable grounds pursuant to the principles and values of customary law and ubuntu.

However, the insurer did not accept the provisional determination, citing case law and referring to inconsistencies in the consumer’s account, while there was also no proof that the deceased was dependent on the complainant.

OLTI found in its final ruling that the provisional ruling was not based solely on equity, as suggested by the insurer. “We found that in the absence of a definition of “other relatives” in the policy, the relationship between the complainant and the deceased fell within the meaning of “other relatives”. To this extent, our decision was based on the policy contract itself.

It was therefore the meeting’s final ruling that the deceased qualified under “other relatives”. The insurer was liable to pay the benefit.

Working from home due to disability

A consumer who worked for Absa was a member of the Absa Group Disability Protection Policy scheme which provided income protection cover and the Absa Group Life Scheme which provided lump sum disability benefit cover.

In or about 2016 the consumer started to experience various symptoms including blackouts and blurred vision and was diagnosed with vasovagal syncope, a condition which causes drops in heart rate and blood pressure that can lead to fainting.

From May 2017, due to the severity of the consumer’s condition and the disruption an episode at work caused her co-workers, the employer decided to accommodate her by allowing her to work from home. In June 2019, at the time the company was undergoing restructuring, she was requested to return to the office.

She wanted to continue working from home, but her employer refused. Despite her employer’s refusal, it appears she continued to work from home for a few months. Thereafter she claimed from Absa Life Limited for the income continuation benefit and the lump sum disability benefit. The insurer declined both claims.

One of the grounds was that the consumer performed her occupation at home from 2017 until 2019 and there had been no deterioration in her condition since 2016 when she was initially diagnosed. The other was that, according to the insurer, the evidence did not show that the complainant was totally prevented from performing her occupational duties which was a qualifying requirement of both the income continuation benefit and the lump sum disability benefit.

OLTI consults expert on consumer’s work-from-home claims

When OLTI received the consumer’s complaint, it called in the assistance of its independent medical consultant. It was concerned that it appeared the consumer was able to work from home. She only submitted her claims when she was informed that she could no longer work from home. She was also told that her job would be affected by the employer’s restructuring exercise.

The independent medical consultant believed there was insufficient evidence to support the consumer’s claims. OLTI’s committee agreed that the complaint should be dismissed. However, the consumer submitted further medical evidence and the case was taken to a meeting of adjudicators.

It now seemed that the case was far from clear cut. The way forward was to make a recommendation to the insurer to consider a settlement. However, the insurer was not amenable to the recommendation. It opted instead to obtain an opinion from an independent neurologist. It confirmed its rejection of the consumer’s claims on the basis of this report.

The consumer responded by submitting a report from her treating specialist physician that confirmed the diagnosis of vasovagal syncope. She also submitted a report from a psychiatrist. The report concluded that she did not meet the criteria of primary psychiatric illness.

Diagnosis upheld despite dissent

The case was again taken to a meeting of the adjudicators, where it was noted that the diagnosis of vasovagal syncope was supported by three medical specialists following an extensive investigation and has not been disputed previously. The meeting also noted that despite disagreeing with the diagnosis, the independent neurologist deferred to the other specialists regarding the consumer’s ability to work.

The opinion of the occupational therapist and psychologist was that she was disabled for work in the open labour market. The treating specialists believed that the consumer should have been boarded as far back as 2019.

In this provisional ruling, the meeting decided in favour of the complainant. However, the insurer did not accept it and the case was taken to a further meeting of the adjudicators. It appeared to the meeting that the insurer failed to properly consider the extensive medical evidence and other evidence. It revealed the extent of the difficulties the complainant had coping with her duties at the workplace and at home.

The complainant’s episodes had a number of triggers which included changes in body posture and even head position. After an episode, the complainant experienced dizziness, difficulty concentrating, disorientation, fatigue, weakness, nausea and palpitations.

On the advice of the occupational therapist, the complainant kept a syncopal episode diary. In 2021 she recorded 9 syncopal episodes in 41 days. Five resulted in loss of consciousness.

OT report: ‘Complainant’s work ability significantly compromised’

In her report, the occupational therapist referred to “significantly compromised work ability” even for simple clerical tasks. The report stated that production speed and work accuracy were below the standard required to perform general administrative work. The occupational therapist also stated that extra work hours required for the complainant to get through her work indicated a reduced work capacity.

The industrial psychologist referred to “considerable limitations” and “significant challenges” which the complainant’s condition imposed on her ability to work effectively even at home.

In a final ruling, the meeting concluded that the complainant had proven on a balance of probabilities that she met the criteria to qualify for the income continuation benefit and the lump sum disability benefit. The insurer accepted our final ruling and paid the claims accordingly.

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