CR221 Funeral Insurance – spouse – waiting period.
Funeral Insurance – spouse – waiting period.
The complainant was the “principal insured person” in terms of a Group Insurance Family Benefit Scheme administered by one company (the Administrator) and underwritten by another (the Insurer). The scheme distinguished between a “compulsory basic benefit” on the one hand, and “optional benefits” and “additional benefits” (including an “Extended Family Benefit”), on the other, for which application would have to be made against the payment of additional premiums.
The Master Policy provided:
A.8.2 DESIGNATION of ELIGIBLE SPOUSES
A.8.2.1 INITIAL DESIGNATION OF ELIGIBLE SPOUSES
Where the Member has more than one spouse who satisfies the definition of Eligible Spouse, the Member must designate the spouse who will be regarded as his Eligible Spouse for the purposes of Compulsory Family Cover.
In addition, the Member may designate a second spouse as an Eligible Spouse for the purposes of Optional Family Cover only.
All such designations must be submitted in writing by the Proposer to [the insurer] in the manner and format described by [the insurer].
A.8.2.2 CHANGES TO DESIGNATION OF ELIGIBLE SPOUSES
A.188.8.131.52 If an Insured Spouse who has been designated by the Member in accordance with clause A.8.2.1 for the purposes of Compulsory Family Cover, dies or ceases to satisfy the definition of Eligible Spouse and the Member has any remaining undesignated spouse or spouses who satisfy the definition of Eligible Spouse, the Member must designate the spouse who will be regarded as his Eligible Spouse in the place of the Insured Spouse who has died or become ineligible. Such designation will take effect on the first day of the month next following the date on which the Insured Spouse died or became ineligible, as the case may be, and must be submitted in writing by the Proposer to [the insurer] in the manner and format prescribed by [the insurer].
The Terms and Conditions:
1. a marriage by law; or
2. a union which is recognised as a marriage in terms of any customary law or under the tenets of any Asiatic religion; or
3. a union where two persons are living together as if married, with the commitment of continuing to do so permanently provided that:
they have been doing so for at least 12 consecutive months prior to the claim; the person is nominated in the schedule; and satisfactory proof is submitted to us regarding the above.
Spouse means the person with whom the Principal Insured Person is joined in marriage. If the Principal Insured Person is joined in marriage to two persons, only one can be nominated in writing as a spouse on the Principal Insured Persons Policy. These details must be submitted to Us during the Spouse’s life for them to be covered. A nomination remains in force as long as the Principal Insured Person is joined in marriage to the person stated on the Policy. In the event of the Principal Insured Person wanting to insure the second spouse the required premium must be paid for the additional spouse and the relevant details must be provided.
“Extended Family” means the brother; sister; half-brother; half-sister; aunt; uncle; niece or nephew; parents or parents in-law; grandparents of the Principal Insured Person, provided such person(s) are under 80 years of age.
WAITING PERIOD IN RESPECT OF NATURAL CAUSES
No benefit is payable in respect of the Death of an Insured Person due to natural causes during the waiting period.
Principal Insured Person and Immediate Family: No waiting period.
Under 65 years – 3 months
65 to 80 years of age – 6 months
A 3 month waiting period shall apply for change of spouse and/or change of eligible children.
It took some time and a fair amount of correspondence to finally abstract the following facts:
09/01/1990: The Complainant married Anna in a civil marriage;
15/12/1995: The complainant married Bella in a civil ceremony. (It later transpired that this was a bigamous marriage and as such not legally valid);
16/01/2003: The complainant entered into a customary marriage with Bella and paid lobola;
30/01/2003: The complainant obtained a decree of divorce in the High Court from Bella. (Since the marriage was invalid the decree of divorce was also invalid).
04/05/2006: Anna died.
17/07/2006: The complainant applied for Bella to be recorded as his first spouse on the Family Benefit Scheme. The application was accepted by the Administrator and Bella was captured in the Administrator’s record as “Spouse 1”.
11/08/2006: Bella died.
14/08/2006: The complainant lodged a claim in respect of the death of Bella.
The claim was declined by both the Administrator and the Insurer on the grounds that Bella died within three months of the complainant’s application to substitute her as the first spouse under the compulsory basic benefit.
The complainant conducted a lengthy and spirited counter-offensive assisted by rather more confusion than was necessary on the part of the Administrator.
The complainant’s main point was that the three months waiting period did not apply to Bella. He contended that she was registered by the Administrator under the compulsory basic benefit in substitution of Anna; as such she fell under the category “Principal Insured Person and Immediate Family” in respect of which, so it was expressly stated, “no waiting period” applied; according to the complainant the three months waiting period applied only to “Extended Family”; consequently the claim should be paid.
We disagreed. The fact that the three month waiting period clause was bracketed under “Extended Family” did not restrict its operation to “Extended Family” members. It was a clause of general application. In fact the definition of “Extended Family” did not include “spouses” or, for that matter, “children”. On the complainant’s interpretation the sentence relating to the three months waiting period would therefore fulfil no function at all and as such would be superfluous.
We pointed out that no waiting period applied to the complainant himself and to Anna, being “The Principal Insured Person and the Immediate Family” at the commencement of cover. But when the complainant subsequently applied to substitute Bella as his spouse, the three months waiting period, on the clear wording of the clause, did apply. Since Bella died within the three month period the claim could not be met.
The complaint was not upheld.