Cancel your insurance policies to your own detriment, warns FSCA
Durban - The Financial Sector Conduct Authority has issued a warning to those wanting to cancel their insurance policies, to be cautious before doing so.
They were responding to messages on social media from people wanting to cancel policies in light of the recent Old Mutual corpse debacle where a KwaZulu-Natal family dumped a deceased's body at the insurer's Stanger offices following an apparent delay in payment.
The Mtshali family took the corpse of their loved one, Sifiso Justice Mtshali, to the offices when they were informed that their claim was referred for additional assessment.
In a statement, FCSA said while they understood the frustration felt by many, they urged customers not to cancel their policies.
"A customer who cancels their life policy may find it very difficult if not impossible to find new cover if they had developed medical conditions along the course of their policy. A life policy taken out when you are younger is usually a lot cheaper than a policy taken out when you are older and a new policy taken out by an older person may not just have higher premiums but it may be difficult to get the same cover and limits they had before. Early termination of an investment policy could attract charges, and these could also be payable on entering an alternative investment," FCSA said.
The authority added that there maybe waiting periods attached to the new funeral cover a client receives.
"If a customer does decide to replace their policy, it is essential to first obtain a detailed comparison of the features and costs of the old and new policies, preferably with the help of a qualified financial adviser," the FCSA said.
The authority said they were interrogating the facts of the case and will take appropriate action where necessary.
The FSCA’s role is to protects financial customers and to make sure that they are treated fairly by financial intuitions. For more information contact the FSCA on 0800 110 443 or visit www.fsca.co.za.