CR345 Telemarketing Telesale of life cover


Telesale of life cover – sales agent representing to the deceased that a nurse would be sent to his place of residence to conduct an HIV test to enable him to enjoy the full benefits of the policy.


1. During June 2010, prior to his death, the deceased applied for a policy by telesale which, in terms of the norm within the insurance industry, was recorded. The recording revealed that the deceased was advised about the terms and conditions of the policy. A restrictive endorsement which was part of the policy contract was also explained to the deceased. The aforesaid endorsement read:

“Endorsement – Restriction on Natural Causes

Notwithstanding anything to the contrary contained in this policy, it is hereby declared and agreed that:

For claims as a result of natural causes:

▫ Cover is set at 100% of the Sum Insured for the first three months of the policy;

▫ Cover will be set at 10% of the Sum Assured for the remainder of the policy if a negative HIV is not provided or the HIV test is reactive;
• Cover will be set to 100% of the Sum Insured as soon as a negative HIV test is provided.

For claims as a result of an accident:

▫ Cover is set at 100% of Sum Assured.”

2. To enable the deceased to comply with the terms of the above endorsement, he was told by the sales agent during the telesale that a nurse would be sent to his place of residence to conduct an HIV test, this despite the fact that their nurses were in fact not available in the area where the deceased resided.

3. No nurse was sent to the deceased, and he passed away on 24 December 2010 by natural causes. When the complainant instituted a claim for payment of the death benefit, the insurer only paid out 10% of the insured amount, citing the deceased’s failure to submit a negative HIV test as a reason for restricting the claim.

4. In support of its decision the insurer advised that shortly after the commencement of the policy they secured the services of a pathology practice to conduct the HIV test on their behalf, and claimed that the deceased was contacted telephonically on 15 June 2011 by the aforesaid practice to confirm his address and to set up an appointment with him. They argued that the deceased would have been advised at the time of the call that it would be impossible to visit him as he was staying in a rural area and that an alternative arrangement would have been made in this regard.

5. The insurer submitted that the onus to provide an HIV test results rested with the deceased. They argued that the fact that the deceased resided in an area where there were no nurses available did not shift the onus. The complainant was aggrieved about this decision, and she approached our office contending that the benefit amount should be paid in full.


6. On receipt of the insurer’s response, we requested a recording of the call that was allegedly made by the pathology practice to the deceased prior to his death. In their response the insurer stated that the aforesaid practice is an outside service provider and does not record conversations with its clients. The insurer reiterated their view that their service provider would have contacted the deceased as no physical address was provided on the request form, at which time the deceased would have been told that they were unable to do the test in the area of his residence.

7. We pointed out to the insurer that the sales agent had represented to the deceased that a nurse would be sent to him even though he resided in a rural area where there were no nurses available. It was clear that a nurse was not sent to the deceased’s place of residence as undertaken by their sales agent. Instead they merely assumed that the deceased would have been contacted by their service provider and told that a nurse was unable to visit him in his place of residence. We put it to them that, in the absence of proof that alternative arrangements were made with the deceased, they had breached the term of their undertaking. They were requested to provide us with their comments.


8. The insurer admitted the full death benefit of R200 000 and paid the balance of R180 000 to the beneficiaries.

February 2013