Insurance shock for parents of disabled Khayelitsha teenager

Siphokazi had been disabled since the age of four and also suffered from epilepsy, like her father Ayanda Qhara, who lost his job as a result of his condition.

The family, including a younger daughter, survive on the earnings of Nomveliso Rululu, who works in a restaurant kitchen.

After GroundUp wrote about the family in June , readers stepped in to help, offering a wheelchair, food parcels, and physiotherapy.

Rululu, 37, said the family had taken out a 1Life insurance policy in May last year, in order to cover funeral expenses if her daughter died. They had explained to the agent who sold them the policy that they wanted their daughter to be the policyholder because they were using their daughter’s disability grant to pay the monthly fee of R110, she said.

In terms of the option they chose, the family was to receive R12,000 if Siphokazi died.

“Siphokazi was made a policyholder and I was then made a beneficiary,” said Rululu. “After a week, the agent came back to the family and said that 1Life Insurance does not allow a minor to be a policyholder. Instead, the guardian should be the policyholder and Siphokazi had to be a beneficiary. But the benefits would not change, the agent promised.”

The policy was changed accordingly.

Fifteen-year-old Siphokazi died last week on Sunday. The family immediately informed the agent, hoping for assistance. To their surprise they found that the agent did not work for 1Life, as they had thought, but for Emerald Wealth Management.

When they got nowhere with the agent, the family contacted 1Life and a consultant informed them that a claim of R12,000 could not be paid out, because Siphokazi was not a policyholder but a beneficiary.

“I asked the consultant whether a minor can be a policyholder and she said yes. We were stunned to hear that,” Rululu said.

Rululu said the family had battled to pay the funeral costs of their child, who was buried in the Eastern Cape at the weekend.

Contacted by GroundUp, a spokesman for 1Life said the policy had been sold by Emerald Wealth Management, an independent broker. Brokers were liable for the advice that they offered, the spokesman said, and concerns with the manner in which products were sold should be addressed with Emerald Wealth Management.

“On the face of it, it seems clear that the policy was issued correctly in terms of the standard policy structure with cover of R12,000 for the principal member and R2,000 cover for the minor life insured,” the spokesman said.

But 1Life took clients’ concerns seriously and would “investigate this matter properly and institute all action necessary should it be required,” he said.

Johan Ferreira, a Legal Executive at Emerald Life, said the matter was being investigated. “ I cannot give a specific date but can confirm the investigation is currently underway,” he said.

Ayanda Qhara standing next to stagnant water behind his shack. Photo by Siyavuya Khaya.

Deputy ombudsman for Long term Insurance Jennifer Preiss confirmed that a minor could own a policy in terms of the law, but said an insurer could have its own rules regarding this and refuse to have a minor as a policyholder.

“There are limits on the amount of life cover that can be granted on the life of a minor below the age of 14 (R10,000 up to age 6 and R30,000 from age 6 to below 14). If the minor is 14 or older there is no legislative limit but the insurer may have its own rules as to what amount it is prepared to cover, particularly in the case of funeral policies. The minor, with the assistance of her parents, could nominate a beneficiary. Alternatively, a parent could own a policy on the life of a minor. Again, the insurer may limit the amount of cover it is prepared to offer in such an event,” she said.

Preiss said the family could lodge a complaint with the insurer or with her office if necessary.

Ruluu said the R2,000 had been paid into the family’s account but she had not withdrawn it as she believed they were entitled to R12,000.