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Insurance fraud hurts us all

According to a BusinessLIVE report, funeral cover shows the highest number of fraudulent claims, followed by death and disability cover and hospital cash plans.
According to a BusinessLIVE report, funeral cover shows the highest number of fraudulent claims, followed by death and disability cover and hospital cash plans.
Image: 123RF/Olivier Le Moal

With almost half of the SA working-age population unemployed, many of whom have lost all hope of finding a job and no longer even look for one, it is no surprise that insurance fraud is on the rise.

But while some cases are driven by desperation, too many are motivated purely by greed.

According to a BusinessLIVE report, funeral cover shows the highest number of fraudulent claims, followed by death and disability cover and hospital cash plans.

The lengths the fraudsters have gone to include hiring hitmen to kill family members and using the HIV-infected blood of others to fake disability.

Statistics for 2021, released by the Association for Savings and Investment SA (Asisa), show that SA life insurers uncovered false claims amounting to nearly R800-million — up more than a third on the year before.

One recent high-profile insurance fraud case that hogged the headlines involved a former policewoman who had relatives murdered so she could claim  their funeral policy payouts.

Another, according to BusinessLIVE, involved a  pastor and his wife who took out life policies on church members with the intent to have them murdered so that they could claim the death benefits.

KwaZulu-Natal and the Eastern Cape, with 23% each of the total, accounted for the most false claims. They were followed by Gauteng at 16% and the Northern Cape 13%.

There are no lengths that people will not go to to get their hands on insurance payouts, it seems, with Asisa citing one case of a nurse claiming she had been infected with HIV after being pricked with a contaminated needle.

She supported the severe illness disability claim with an HIV-positive test result.

However, there was no record of her ever being treated for HIV and, on being asked to be tested by an independent laboratory, she realised the game was up and admitted using the infected blood of someone else to support her claim.

The value of that claim was R1m. 

False or inflated insurance claims, whether on life, disability, funeral, household, vehicle or any other type of  policy, affect us all.

Besides the unfortunate victims murdered to enrich others, normal policyholders face higher premiums when the number and value of claims go up. 

So think twice before you claim for the ring that “slipped off your finger and went down the drain” or the “treasured heirloom” you never actually had in your possession.

No crime is victimless.

HeraldLIVE

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