Funeral fraud

by | Aug 16, 2021 | Personal Finance

Sadly, there are still conmen and women out there selling fraudulent funeral policies. This often means that when a death occurs and the family needs the money most – no payout is made. This will bring immense distress to families who had planned to give their loved ones a fitting and dignified burial.

Fraudsters are targeting the public, and insurance companies alike. South African life insurers reported a 12% increase in fraudulent and dishonest claims across all lines of risk business in 2020 when compared to 2019. The 2020 fraudulent and dishonest claims statistics, released this week by the Association for Savings and Investment South Africa (ASISA), show that last year 3 186 cases of fraudulent and dishonest claims to a value of R587.3 million were recorded, compared to 2 837 fraudulent and dishonest claims in 2019 valued at R537.1 million.

The highest incidence of fraud and dishonesty last year took place in the funeral insurance space, where a total of 2 282 claims were found to be fraudulent or dishonest.

Commenting on the statistics, Megan Govender, convenor of the ASISA Forensics Standing Committee, says the increase in fraudulent and dishonest claims is not surprising since tough economic conditions make it more tempting for dishonest policyholders and syndicates to try their luck in the hope of scoring sizeable insurance pay-outs.

Govender says while funeral insurance has always been seen as a soft target for fraudsters, the Covid-19 pandemic has made it worse. He says desperation due to job losses is driving more people to resort to crime while the pandemic has also resulted in a significant increase in deaths, which makes it easier to source dead bodies from flooded mortuaries for fraudulent claims.

“Since funeral insurance 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, criminals and dishonest individuals most commonly try their luck in this space.”

The Financial Services Conduct Authority (FSCA) regulates financial services in South Africa, and have warned South Africans about common funeral policy scams to look out for.

Rather be safe than sorry and do these checks before handing over money for funeral policies.

[Check that the business or entity is a registered financial services provider on the FSCA website at  www.fsca.co.za  or call them directly on 0800 20 37 22

  • If you are buying through a broker or someone else, make the effort to check that he or she is an authorised representative of the company they say they represent and that they are registered to sell funeral policies.
  • Before you sign anything, ask for their full name and a letter from the company giving them permission to sell their product –  and use this to check with the company that they do actually represent them. You can also check their registration on the FSCA website
  • Check that the policy is underwritten by a long-term insurer – you can find these details on the policy document. It is also wise to  call this long-term insurance company  to make sure they are in fact underwriting your policy
  • Watch out for premiums that are much lower than most of the premiums that you have seen for similar funeral policies. If it looks too good to be true, it probably is.
  • Make sure that you receive a policy document.


Criminals  do not care. They will smooth talk, lie, cheat and steal to get what they want. Covid has been  financially hard on everyone. Rather be safe than sorry and do the necessary checks that will give you peace of mind that your are dealing with a reputable insurer and company representative .

If you suspect you may be a victim of a scam, you can report it to the FSCA on 0800 20 37 22 or email: [email protected].

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