CR93 Funeral policy – insurer’s reliance on “maximum cover” provision


Funeral policy – insurer’s reliance on “maximum cover” provision


The policyholder effected a funeral policy on 31 January 2002 via a bank and underwritten by an insurer covering his immediate family and his mother and mother-in-law. Both were covered for R4 000 each but this was subsequently increased to R8 000 after the policyholder responded to a marketing initiative received via the bank. When the mother-in-law passed away on 27 December 2004, the insurer paid R4 000 for the initial cover and refunded all premiums paid amounting to R1 500 calculated from the date the cover was increased. The insurer advised that the further R4 000 could not be paid as the deceased was also covered under another policy under which a claim for R4 000 was also met.

The policyholder complained to this office about his dissatisfaction that the entire sum assured was not paid.


The insurer relied on the maximum cover provision in the policy which stated:

“A member, spouse and child may be nominated only once on each policy and may be covered on a maximum of two policies”.

It was, however, pointed out to the insurer that the policyholder was claiming for his mother-in-law and the relevant provision read as follows:

“A parent and other dependant relative may be nominated twice on the same policy and covered for twice the benefit amount shown …”.

It appeared to this office that the insurer was obligated to honour the claim for R8 000 and we suggested that the difference of R2 500 be paid together with interest.


An amount of R2 608,54 was paid to the policyholder.

October 2005