CR281
Funeral Insurance

Funeral policy – fund rule stipulating that a child over 22 years would only remain covered if he or she was a registered full-time student.

Background

The policyholder, a member of a fund, had a funeral policy covering her spouse’s life and that of their children. As to the children the relevant fund rule stipulated:

“Membership will cease:
(a)….;
(b) for dependent children, when they attain the age of 22, or 26 years if they are still registered as full-time students/scholars at a recognised educational institution…”

The insured’s daughter died in a motor collision on 28 September 2008 when she was 25 years old. A death claim was lodged with the insurer, one of the documents submitted being a certificate of symbols issued by the Department of Education in which it was stated that the child was doing Grade 12 on a “part-time basis”. The claim was declined because, so the insurer contended, the certificate proved that the child had only been studying part-time, whereas the fund rule required that a child over the age of 22 years would only remain covered if he or she was still a “full-time student”.

Discussion

There were no legal grounds on which to uphold the complaint, because there was insufficient information upon which to hold that the child had been a “full-time student” as defined in the rule. The office nevertheless recommended to the insurer that it consider an ex gratia payment of 50% of the claim in view of the following:

1. The certificate of symbols issued by the Department of Education was not sufficient proof, despite its wording, that the deceased was registered as a part-time student. We pointed out to the insurer that confirmation for this should have been obtained from the school concerned.

2. It appeared from the complaint that the deceased had been improving her symbols with the intention of pursuing her studies at a tertiary institution. As a result we took the view that if she had not died and had managed to improve her symbols she would probably have been registered as a full time student in the following year and would have been covered in terms of the rule concerned.

Result

The insurer accepted the recommendation, and the complainant was pleased with the settlement whereby 50% of the claim was paid.

NS
October 2009
G E Matimba
2008/BG/7127