CR398 – Mistake by insurer – beneficiary nomination changed

Mistake by insurer – beneficiary nomination changed – nomination change not properly effected according to insurer

  1. The complainant was one of the two policyholders and beneficiary of the policy applied for which commenced on 1 January 2001. The deceased was the insured life on the policy. When the complainant’s partner resigned from their company, the beneficiary was changed to the deceased’s then wife. The deceased became the new premium payer on the policy. The insurer duly notified the complainant that the beneficiary change had been effected.
  2. When the deceased passed away in 2018, the insurer paid the benefit to the complainant and his ex-partner in business at 50% each of the benefit sum, it arguing that since there was no proper change in nomination of the new beneficiary, it was necessary to revert to the original contract. It offered the maximum compensation of R50 000 to the deceased’s wife, which was declined.
  3. During the exchange of correspondence between the parties, it was discovered that the erstwhile partner, who had not signed for the change in beneficiary nomination, had written to the insurer indicating his willingness to sign over his share of the policy to the deceased’s wife and had apologized for the burden on the deceased’s family. He requested that his share of the policy proceeds should be used to pay his account with a security company and that the balance thereof should be paid to the deceased’s wife. This information had been communicated to the insurer well before the benefits were paid.


Presented with this information, the insurer agreed to settle the claim by paying to the deceased’s wife the amount which it had paid to the partner, less the account of the security company. The complainant accepted the offer and the matter was finalized.