CR25
• Funeral Insurance – who is the correct claimant?

In another case the policyholder took out cover on his own life. The beneficiary, according to the application form, was described as, say, “Hendrick Katama Tshilumba”. Directly below the name “Hendrick” there was a note in brackets “father” but the name “Katama” was not in any way qualified. On the policyholder’s death his mother, having unsuccessfully claimed payment under the policy from the insurer, lodged a complaint with this office. She explained that “Hendrick” was the first name of her late husband, the policyholder’s father, while “Katama” was her own name. There was no “or” between the two names. To the extent that the nomination was ambiguous it left three possibilities:

(i) that the nomination was legally ineffective since there was no person complying with the description ”Hendrick Katama Tshilumba”. Consequently the benefit should be paid to the policyholder’s estate;

(ii) that the nomination must be read as if it contained the word “or” between the two names “Hendrick” and “Katama”, in which case there would be alternative nominees;

(iii) that the nomination must be read as if it contained the word “and” between the names “Hendrick” and “Katama”, in which case it would have been a joint nomination.

Since it was unlikely that the policyholder intended an invalid nomination, as in (i), and since (ii) would create, as at the time it was inserted, the potential of conflict and dispute, the most likely reading, taking all the surrounding circumstances into account, so we held, was that the word “and” was inadvertently omitted and that a joint nomination was intended. On that reading it was clearly an implied term that if either of the nominated beneficiaries should pre-deceased the life assured, as happened, the surviving beneficiary would qualify for payment.

The insurer accepted that approach.

PMN