Are funeral policy increases killing your budget? Wendy Knowler advises

Are funeral policy increases killing your budget? Wendy Knowler advises

Some insurers have increased their clients' funeral policy premiums for the second time in a year. Consumerwatch’s Wendy Knowler found out if that’s legal...

Funeral policy

Two months ago, the Committee of the Actuarial Society of South Africa reported that four of South Africa’s largest life insurers reported increases of between 50% and 60% in death claims. This was against fully underwritten individual life policies between March last year and the end of January this year, with claims for January being four times more than those recorded in January 2020, before the pandemic hit.

Perhaps it was inevitable, then, that funeral policy premiums are on the increase.

Phumi wrote to me earlier this month to say that Hollard, having increased her funeral policy premium in March on her policy’s anniversary date, as usual, then imposed a second increase this month, adding a total of R170 to her premium in less than a year.

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“Is this even legal?” she asked.

“Is there anything I can do to prevent this second premium increase? I have had this policy for about 10 years now.”

The FSCA said this week in a media release that “the practice by some insurers of increasing premiums more than once for the same policy within a 12-month period (even though the terms and conditions allow only for increases on the anniversary of the policy) falls foul of the requirements of the Policyholder Protection Rules."

The regulator said it “notes with concern” the high premium increases that are being implemented by insurers on funeral policies throughout the industry.

“It is the view of the FSCA that premiums must be priced correctly at the inception of the policy so that any increases which may be implemented would still result in fair outcomes for policyholders and the policy continuing to perform as expected.”

And the regulator warned that insurers should not use COVID-19 as a reason to make up for historically low premiums which were “consciously based on overly optimistic assumptions .......”.

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Hollard said it had to implement a second premium increase "as result of mortality experience exceeding expected experience across our entire funeral portfolio, over a period of more than a year."

It affects the insurer’s direct book of business - that’s policies taken out over the phone and policies sold under the Kaizer Chiefs brand, but excludes any business sourced from partners such as Edgars and Jet.

Phumi’s policy document reads: 

“Hollard may increase the benefit premiums from time to time by giving you 30 (thirty) days’ written notice of such increase.”

“Unfortunately,” Hollard said, “the combined effect of the re-rating and the increase have resulted in a substantial overall increase. We realise that policyholders may be facing financial challenges in these tough times, and fully understand if anyone wishes to decrease cover in order to lower premiums."

Take a listen as Wendy Knolwer thoroughly explains the importance of checking your funeral policy documents: 

BOTTOM LINE: If your insurer has or has not told you it intends to increase your funeral policy a second time within the year, then check  your policy document. 

If the terms and conditions allow only for increases on the anniversary of the policy, dispute it. If you get no joy from the insurer, lodge a complaint with the Ombudsman for Long-Term Insurance.

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Netflorist’s spam makes people blooming furious

A lot of people have been very vocal on social media about repeatedly unsubscribing to Netflorist’s emails, only to have them continue to land in their inbox. Several have said that it’s easier to get divorced than it is to get Netflorist to take them off their mailing lists.

Recently, Sally Partridge tweeted: “Incredibly, Netflorist is still sending me email reminders for a friend’s birthday who is no longer around. I have been trying to unsubscribe for a YEAR. Responding, Netflorist said those emails were for special occasion reminders which she had “personally added. But if you no longer need reminding, one of our call centre agents will gladly assist in manually unsubscribing you.”

What, so now we need to make a call to stop the spam?

To find out, I made contact with Netflorist MD Ryan Bacher. 

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He admitted that the company’s email unsubscribe process "isn’t great” and put that down to the company using two systems to send e-mails.

"You can unsubscribe from each of our mailing lists but we have quite a few different ones, which makes this inconvenient for customers. So we are building an interface where you can do all at once or individually.

"We are consolidating all our emails and building a system on our site under ‘Profiles’ where customers can manage all their subscriptions in one place.

"That should be live by the end of September," Bacher said.

* To submit a complaint to the Information Regulator about non-compliance to the POPI (Protection of Personal Information) Act, email [email protected] 

Contact Wendy

Get in touch with Wendy via her website or her Facebook page. Please note that Wendy is not able to personally respond to every email she receives. If she is able to take up your case, she will contact you directly. Here are other avenues for you to consider.

Listen to more podcasts from Wendy Knowler in the Consumerwatch channel below: 

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