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Funeral Scheme Underwriters. June 2022

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Welcome to our blog. In todays topic, we will be talking about funeral scheme underwriters. We will give you all the details you need about funeral scheme underwriters. stay with us.

About funeral scheme underwriters

The burial insurance sector in South Africa appears to be in the news a lot for all the wrong reasons. The majority of complaints received in 2019 pertained to funeral insurance policies, according to the current Long-Term Insurance Ombudsman annual report, issued in May 2020, with consumers complaining about unpaid claims and inadequate service.

Furthermore, the Financial Sector Conduct Authority (FSCA) often advises consumers to avoid funeral insurance providers who are not underwritten by a registered long-term insurer. However, burial insurance is by far the most popular financial product among South Africans.

Both culturally and commercially, funeral products play a critical role in society. It is consequently critical that policyholders have the assurance that their funeral plan is underwritten by a reputable and trustworthy insurance company.

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No guarantee without underwriting!

Funeral insurance is designed to help cover the costs of funeral services, which are often supplied by a funeral home. A funeral policy must be underwritten by a licensed long-term insurer to ensure that the policyholder and their beneficiaries will receive their benefits if a valid claim is made.

Table 1 of Schedule 2 of the Insurance Act outlines the characteristics of a life insurance policy covered under the funeral class of life insurance business. Unlicensed individuals are prohibited from conducting insurance business in South Africa under Section 5 (1) of the Act. This means that no funeral coverage can be sold unless it is underwritten by a licensed insurer. In provisions of the Act, any insurance that is not underwritten by a licensed insurer is not valid, placing consumers at risk of not receiving their policy benefits if they make a claim.

The customer’s perspective

What should your consumers think about before purchasing funeral insurance? End-consumers should verify with the FSCA to see if the institution with whom they are doing business, whether it is a brokerage, a funeral home, or an individual, is registered with the Authority to provide financial advice and intermediary services. They should also verify which type of advise the agent or representative is authorized to deliver.

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Consumers can check the FSCA website (www.fsca.co.za) or phone them at 080020 37 22 to see if an institution or person is authorized to provide financial services. Every policy paper must also include the name of the licensed insurer who is underwriting the insurance, according to the law. Consumers can check the policy paperwork for the insurer’s contact information and contact the insurer to confirm if the policy in question is underwritten.

Breaking the law

Purchasing funeral insurance from an unlicensed or unapproved financial services company has major consequences (FSP). Risk is what insurance is all about. Consumers who purchase funeral insurance from a licensed FSP are assured the benefits of their policies as long as they have met all of their policy responsibilities, including as paying their monthly premiums.

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If a consumer purchases funeral insurance from an unlicensed FSP, the policyholder and beneficiaries will not be assured payment of benefits if a claim is made. Furthermore, consumers who buy funeral insurance from an unregistered FSP may not be able to easily contact the FCSA or the Long-Term Insurance Ombudsman if they have issues with the underwriter or broker.

Whether you’re selling funeral products or wanting to get a funeral policy, make sure you do your homework to ensure that the product supplier and sales agent you’re dealing with are both licensed and that the policy is properly designed.

Thank you for reading our todays post on funeral scheme underwriters, we hope you enjoyed our post on funeral scheme underwriters.

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