Family plans to sue insurer over funeral policy payout

A Tshwane family is threatening to take Old Mutual to court over what they say was unfair payout on a funeral policy.

The family say they received R2,150 instead of R15,000 for the funeral cover claim. They say Old Mutual penalised them over an administrative matter which led to the gender and surname of the deceased being  captured incorrectly.

Ditabe Mongau from Atteridgeville, claimed for the death of his mother-in-law Johanna Nkutsoeu, who  passed on in November. He said the insurance company only paid him R2,150 instead of the full cover amount of R15,000. Mongau has been paying a monthly premium of R153 for the policy he took out in 2001. 

According to him, the company had incorrectly captured the deceased’s surname as Mkhunkutsweu and with a gender of a male. This was the basis the company used not to pay him the full amount, he told Sowetan on Tuesday.

The company came under fire on social media in the past few days after another family, the Molefis, took to X to voice their frustrations over a R3m pension that Old Mutual was allegedly refusing to pay for their relative. The posts created a social media storm, with some Old Mutual clients saying they were leaving the company because of the alleged ill-treatment of clients. 

Mongau said although the funeral was paid for by their second insurer, the family needed the money from Old Mutual to put food on the table. 

“They said my mother-in-law’s details were incorrectly recorded. Eight days later they paid R950 and another R1,200 and said they could not pay us the full amount because the details of the deceased were not correct. They do not want to shoulder any blame, even though they are the ones who recorded the information. That is unfair,” said Mongau.

He shared the policy details with Sowetan and they show the discrepancies. Mongau said he intended to take the company to court over its decision.

Thakane Setsabi-Mushonga from Old Mutual said they were still investigating the allegations that the full payment was refused on the basis of incorrectly recorded details of the deceased. 

“Mr Ditaba Mongau’s funeral plan sadly lapsed in 2006, but his mother was not covered under this benefit. His mother was, however, covered through an extended parent funeral plan for an elected cover amount. As such, at the time of Mr Mongau’s mother’s passing, Old Mutual did pay out the elected cover amount as per the plan.”

"Appropriate action will be taken following a thorough investigation...We will respond to these inquiries as soon as our investigation is complete and outline the steps we are taking to resolve the issue," he explained. 

He further told Sowetan on Tuesday that they had paid the family a reasonable amount according to the terms and conditions.

“Unfortunately, because of our policy to respect the client’s confidentiality, we cannot disclose the amount we paid to the client. However, it is a reasonable amount aligned with his policy.”

In 2019, Old Mutual was caught in another scandal when they allegedly refused to pay funeral cover to a family from KwaZulu-Natal.  

The family took the matter into their own hands and dropped the corpse at the company’s office. Old Mutual allegedly paid after the video of the coffin at their offices started trending online.  

In the Molefi family matter, Old Mutual released a statement yesterday, saying the issues had been resolved after the company met with the family.

“Old Mutual once again apologises for the way the issue was handled and recognises that this has been frustrating for the family. However, Old Mutual’s reluctance to engage and debate on X stems from the complexities of the case and our duty to protect the personal information of the individuals involved.”

The company said it was concerned with the complaints they have seen on social media. 

“The sheer number of customers that have voiced their unhappiness on X with regards to our levels of service is of huge concern to us. We apologise unreservedly to all customers who have been unhappy with the service we have provided, and we are continuously looking at ways to improve this.”