CR84 Funeral policy
Funeral policy – claim repudiated on basis that deceased did not fall within definition of “spouse” and complainant did not pay funeral costs – “common law spouse” – equity.
The complainant took out a funeral policy in 2001. He elected to pay premiums for “member, spouse and children” to include cover for the woman he was involved with and her children. The woman died three years later. When the complainant tried to claim the funeral benefit (a cash sum) the insurer refused to pay, stating as reasons that he and the deceased had not lived under one roof as husband and wife or shared the costs of running a home together, and he had not been involved in the funeral arrangements.
The complainant provided an affidavit stating that, although not married, he and the deceased had lived as man and wife; he also furnished an affidavit from the school principal confirming this. He stated that the deceased had had a house about fifty yards away from his house where she was with her children during the day but that she stayed with him at night, and sometimes he slept at her house. According to the insurer’s investigator, the deceased’s children confirmed that the complainant bought food and electricity for them; the school principal confirmed that the complainant and the deceased had attended school functions together. The complainant stated that he had promised to marry the deceased and had been saving for the marriage, as “trou is nie perdekoop nie”; he had taken out the policy with the impending marriage in mind. He stated that he had not attended the funeral as he was unwell; he was an epileptic and did not wish to embarrass the family. Although he had not paid for the funeral he had outstanding debts arising from the funeral.
The definition of “spouse” in the policy reads as follows:
“Spouse – means the legal or common-law husband/wife of a Member or such other person residing with the Member who is normally regarded by the community as the Member’s husband/wife”.
Our office took the view that, in the circumstances, considerations of equity required that the deceased be regarded as conforming to the requirements for the definition of spouse. Furthermore it was pointed out that there was no requirement in the policy that the policyholder be “involved” with the funeral arrangements; the benefit payable on the death of an insured is a cash benefit and there is no requirement that this actually be used to defray funeral costs. A preliminary ruling was made that the claim should be admitted.
The insurer’s legal advisor responded that to regard the complainant’s relationship with the deceased as one of common-law husband and wife was stretching the meaning of the term too far, stating “there is clearly no difference between the claimant’s relationship and that of a typical everyday boyfriend-girlfriend relationship”. The insurer’s view was that the parties should at least live under the same roof, and that, although the benefit was a cash sum, the general principles applicable to funeral policies still applied, namely that a funeral policy could only be effected by one who has an insurable interest in incurring liability for the funeral of a person.
Our office conceded that co-habitation was undoubtedly a salient feature of a “common law relationship”, but it was not the only one. The definition of “spouse” included a relationship where the parties were considered by the community to be husband and wife; the notion of “common law” spouse also incorporated the requirements of some duration and stability. In this case there was uncontradicted evidence from members of the community that the relationship between the complainant and the deceased was a long-standing and stable one and that they were regarded as a couple. On the facts provided by the insurer the deceased stayed with the complainant every night, and the complainant contributed to the support of the deceased and her children and had undertaken to marry her when he could afford to do so. To equate that relationship to a “typical boyfriend-girlfriend relationship” was, in our view, understating the true position.
Our office is enjoined to ensure that due weight is accorded to considerations of equity. In this light, our view remained that in the circumstances the deceased should be considered the common law spouse of the complainant. Furthermore the facts in our view demonstrated that the complainant had an insurable interest. The complainant had also stated that there were outstanding debts arising from the funeral which he intended to defray with the proceeds of the policy.
Our final ruling was that the funeral benefit arising on the death of the deceased was payable to the complainant, and that the claim must be admitted and paid, together with interest from date of initial repudiation.