The Financial Services Board (FSB) this week warned against using the services of yet another funeral assistance business that is operating without lawful registration and without its benefits being underwritten.

The financial services regulator says Family Assist Cover is representing itself as a financial services provider but it is not registered in terms of the Financial Advisory and Intermediary Services (FAIS) Act to give financial advice or services.

Family Assist Cover is the latest of some 14 unregistered companies or individuals that the FSB has investigated recently for selling funeral policies that are not underwritten by a registered life insurance company.

Any broker, adviser or funeral parlour that sells you a funeral policy must be registered in terms of the FAIS Act - this helps to ensure that they are not fly-by-night operators who will disappear with your money.

Any policy sold to you must also be underwritten by a registered life insurer - that means that the insurer takes responsibility for paying you or your family the benefit when you or a family member pass on. And the FSB makes sure the insurer has enough money to pay your benefits when they are due.

The FSB says that Family Assist Cover is using the logo and a financial services provider number of KGA Life Ltd, to sell policies and is claiming that the policies are underwritten either by KGA Life.

It is also claiming that some of its policies are underwritten by Avbob Mutual Assurance Society. However, neither KGA Life nor Avbob have underwritten any policies from Family Assist Cover, FSB says.

Brad Frank, a senior policy advisor for the organisation that represents life insurers and fund managers, the Association for Savings and Investment South Africa (Asisa), says you can protect yourself from dishonest people selling illegal policies by asking the right questions and checking your policy documents.

Frank suggests you ask:

If the company isn't one you know, like Old Mutual or Sanlam, you can e-mail the FSB at info@fsb.co.za or call 0800-20- 20-87 to check that the company is registered by the FSB. You can also visit the FSB's website: www.fsb.co.za

If you buy the policy, make sure the same life insurance company's name and registration number appears on your policy contract.

You should be given a certificate of assurance within 60 days of buying the policy. Frank says this certificate confirms that you have funeral cover in place and you should phone the insurance company to check that the certificate is valid. If you are given a membership certificate from a funeral parlour, you know that you have not bought a funeral policy, but a funeral parlour membership. If you sign up with a funeral parlour as a member, you and your family will receive a funeral services benefit in return for monthly membership fees. A funeral parlour membership usually does not pay a cash benefit.

Frank says if you pay for your premiums in cash, you should ask for a receipt after every payment and keep these as proof. The name of the life company that issued your certificate of assurance must appear on the receipt, together with a reference to your policy number.

Avoid paying premiums in cash; registered insurance companies will never insist on cash payments, Frank says.