Anyone who has ever had to fight with an insurance company to claim for damages or death would find it hard not to sympathise with the people who, out of desperation, took a dead body with them to a KwaZulu-Natal Old Mutual branch.
At the time, the whole thing was pretty shocking. Dead bodies aren’t usually carted around in public.
As it turns out, however, dead bodies have played quite a big part in insurance claims over the last year, and some of those bodies were ‘rented’ for the purpose of insurance fraud.
Before we unpack that, here’s BusinessTech with the results of a recent report by the Association of Savings and Investment South Africa (ASISA), that looked into irregular claims in the life insurance industry.
South African life insurers detected 3,708 fraudulent and dishonest claims to the value of R1.06 billion in 2018, and a growing number of these fraudsters are ‘renting’ dead bodies for their scams.
Donovan Herman, convenor of the ASISA Claims Standing Committee, says life insurers owe it to honest policy holders to protect the integrity of the long-term insurance model by preventing fraud and dishonesty.
“If we allow fraudulent and dishonest claims, honest policyholders will ultimately end up footing the bill through higher premiums driven by untenable claims rates.”
So, about those dead bodies…
Reports from the forensic departments of life insurers show that the buying and renting of dead bodies for the purpose of obtaining fraudulent death certificates is a popular modus operandi.
Herman says funeral policies do not require blood tests and medical examinations and are designed to pay out quickly and without hassle when an insured family member dies.
That’s low. It’s also surprisingly easy. You’d think these things would be regulated. He also casually goes on to drop the fact that bodies can be ‘bought’, but then doesn’t elaborate.
While we’re on the topic of death, some facts and figures about funeral claims.
Life insurers rejected 1,915 funeral claims worth R176.4 million in 2018, of which 1,127 were found to involve fraudulent documentation.
Another 156 fraudulent claims showed syndicate involvement and in seven cases beneficiaries were found to have caused the death of the policyholder.
The life insurance business is clearly dark and full of terrors.
On the plus side, the number of fraudulent death claims actually decreased this year, which is a good sign.
When you take all of this into consideration, it’s not hard to see why insurance companies are insisting on investigating claims before they pay out.
And please, don’t sell the corpses of your friends and family to fraudsters. It’s not a good look.
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