CR86

Funeral Insurance – nominated beneficiary – beneficiaries cannot be identified or traced.

Background

The deceased took out a funeral policy naming two beneficiaries, the one described by name and age as “grandmother” and the other as “sister”.

When she died her one child complained to us that payment should be made to the deceased’s three children.

Discussion

We wrote to her as follows:

“The legal position may be summarised as follows:

(i) you, your brother and your sister are not nominated beneficiaries. Accordingly you cannot advance a claim against the insurer on that basis;

(ii) the nominated beneficiaries are described as the deceased’s grandmother and sister respectively. Each would be entitled, on proper proof to the insurer of their capacities and entitlement as such, to half of the amount payable in terms of the policy;

(iii) if either of them in fact did not exist at the time of the death of your mother, it would mean that that particular nomination was invalid and her half would accrue to the remaining beneficiary;

(iv) if neither of them in fact existed at the time of the death of your mother it would mean that the beneficiary nomination as a whole failed and the proceeds would accrue to the deceased’s estate of whom you, as the children, would appear to be the intestate heirs.

To succeed to the proceeds of the policy as intestate heirs you would therefore have to prove to the insurer on a balance of probabilities that the persons nominated as beneficiaries did not exist at the time of your mother’s death. “

The complainant thereupon filed an affidavit to the effect that her mother did not have a sister but that she heard that her grandmother was still alive.

In comparing the daughter’s affidavit to the deceased’s beneficiary nomination it was difficult to escape the conclusion that the description in the beneficiary nomination “grandmother” was incorrect and should have read “mother”. But even that assumption did not solve the problem since the initials in the policy document did not correspond to the deceased’s mother’s actual names.

Result

In the circumstances the insurer, with our concurrence, decided to pay the benefits to the deceased estate.
PMN
10/2005