Lee Bromfield | CEO | FNB Life | mail me |
Claims rejected for death occurring during waiting periods is one of the leading causes of complaints to the office of the Ombudsman for long-term insurance.
Generally, funeral policies have a 6-month waiting period before a customer can claim. If a customer chooses to change their insurer, they would be obligated to serve a waiting period with their new insurer even if they had completed waiting periods with their previous one.
Customers who don’t want to be left exposed during the transition period would therefore have the financial burden of paying a double premium while waiting for new waiting periods from their new insurer to end.
Removing barriers to switch providers
In a bid to remove barriers for funeral policyholders to switch providers, we now waive completed waiting periods on existing funeral policies to enable their customers to enjoy better value for money without any added risk exposure.
When all funeral insurance providers are re-licenced under the new Insurance Act, the waiving of waiting periods will be a standard.
For the past four years, we have been known to have an exceptional funeral product in the market. However, our customers have shown concern about serving yet another new waiting period when switching their other policies to us.
This change is one of the most important customer friendly enhancements we are bringing to market to create convenience and ease of accessibility to our product.
We are currently the only insurer that waives waiting periods upfront and not at claims stage. The customer documentation is updated with the correct waiting period end date. This makes our process transparent and gives clarity to customers and their beneficiaries as to when they can claim.
PPR2.A insurance legislative change brought into effect
The PPR2.A legislation was introduced to offer South Africans the opportunity to be covered without being exploited or treated unfairly and brings about the following changes for customers:
- The funeral insurance industry is now regulated, and even micro-insurers have to be licensed, thus protecting customers from fly-by-night unlicenced companies that cannot be held accountable for services.
- Waiting periods and policy reinstatement rules are now regulated. The waiting period for natural death is now 6 months at most, unlike the set 13 months by some insurers. This gives customers the certainty in relation to when they can expect a claim to be paid out.
- Insurers now have to waive waiting periods that are already served when customers switch. This means that the customer remains covered during the transition.
- Once customers have provided all required documents, insurers will have to provide an outcome of a funeral claim within 48 hours. This is to protect customers from unnecessary delays in claim payments.
In conclusion
Our primary focus since inception has been on driving a customer centric approach to our insurance solutions for both the benefit and convenience of our clients. Thus we are aligned with the legislative changes.
We remain highly committed to offering our clients great value and seamless experiences in relation to their insurance solutions and believe that the adherence to legislation for the greater good of our clients will continue to give us a competitive advantage in both the local and global markets.