CAPE TOWN - Life insurance policies are meant to provide financial security and support to families when their loved one dies.
But experts warn that some families are turning this into a money-making scheme for personal gain at the cost of someone’s life.
According to the recent Insurance Crime Bureau report, this is becoming a trend.
Insurance Crime Bureau CEO Garth De Klerk said the plot often involves individuals unlawfully or lawfully taking out policies in the names of victims and subsequently murdering them to benefit from the payouts.
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A kind of crime that shows no mercy, but there is a motive.
“It's economically driven. Times are really tough. People are prepared to kill for financial benefit.”
According to De Klerk, it would be difficult to gauge how widespread the crime is, but efforts to crack down on such a crime are ongoing.
“There are definitely hundreds of incidents that we are investigating. Because of the investment of the insurance industry, we can detect, investigate, prosecute, and successfully convict individuals,” De Klerk said.
In a more recent case, the Mbombela High Court in Mpumalanga is dealing with a funeral policy payout case.
The case involves a woman who allegedly lured her 62-year-old mother to killers for an R80 000 payout.
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The National Financial Ombud Scheme’s Denise Gabriels laid bare the reality, saying having a family relationship with someone does not necessarily stop them from becoming a target.
According to Gabriels, the law states that those with an insurable interest, which is usually a family or financial relationship, are allowed to take out cover on another person's life.
But she claims that recent cases have shown that family interest is not enough to protect one against these violent crimes.
“More needs to be done than just requiring that insurable interest between the policyholder and the beneficiary,” she said.
Gabriels emphasised the need to ensure that one protects their personal information quite closely; this includes their ID number but also checking with insurers if there are any covers taken out for you without your knowledge.