The Financial Services Board (FSB) warned last week against utilizing the services of another funeral assistance business that is operating without lawful registration and without its benefits being underwritten.
The financial services regulator says that Family Assist Cover is representing itself as a financial services provider. However, it isn’t registered in terms of the Financial Advisory and Intermediary Services (FAIS) Act to provide financial advice or services.
Any broker, adviser or funeral parlour that sells you a funeral policy has to be registered in terms of the FAIS Act – this helps to make sure that they aren’t fly-by-the-night operators who will disappear with your money.
Any policy sold to you has to also be underwritten by a registered life insurer – that means that the insurer takes responsibility for paying you or your family the benefit when you or a family member pass on. The FSB ensures that the insurer has sufficient money to pay your benefits when they are due.
Brad Frank, a senior policy advisor for the organisation that represents life insurers and fund managers, the Association for Savings and Investment South Africa (Asisa), says that you are able to protect yourself from dishonest people selling illegal policies by asking the correct questions and checking your policy documents.
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Frank suggests that you ask these questions:
Is the life company that is issuing the policy registered?
If the company isn’t one you know, like Discovery, Assupol, Hollard, Sanlam, Old Mutual, you can email the FSB at [email protected] or call 0800-20- 20-87 to check that the company is registered by the FSB. You can visit the FSB’s website: www.fsb.co.za
If you purchase the policy, ensure the same life insurance company’s name and registration number appears on your policy contract.
Will I get a certificate of assurance or a certificate of membership?
You should be given a certificate of assurance within 60 days of purchasing the policy. Frank says this certificate confirms that you have funeral cover in place and you ought to phone the insurance company to check that the certificate is valid. If you’re given a membership certificate from a funeral parlour, you know that you have not purchased a funeral policy, but a funeral parlour membership. If you sign up with a funeral parlour as a member, you and your family will receive a funeral services benefit in return for monthly membership fees. A funeral parlour membership usually doesn’t pay a cash benefit.
Where is my proof of payment?
Frank says if you pay for your premiums in cash, you need to ask for a receipt after every payment. Keep these as proof. The name of the life company that issued your certificate of assurance has to appear on the receipt, together with a reference to your policy number.
Keep these questions in mind!
