Is my stillborn baby covered by Funeral Cover?
A stillborn baby is not something that is pleasant to think about. Hopefully, you’ll come home with a bundle of joy. If you don’t however, who will pay for the burial?
Here’s a case presented to the Ombudsman for Long Term Insurance –
A client with a group policy had a still-born child, and the policy required notification of its birth in order to add it to the plan.
They approved the claim, however, the firm never paid out the funds and would not answer any queries. She then approached the Ombudsman for help.
The Stillborn baby and The Ombudsman’s investigation –
The option that she had selected when signing up for the plan provided cover for herself, husband and five children. The cover amounted to R20 000.
The policy allowed for another three kids which increased the premium, for a cover amount of R10 000.
According to the terms of the plan, a child still-born after 28 weeks is insured. The claimant, however, had to contact the company and inform them of the birth and that there were five children already covered.
In this case, it would be the parent’s sixth child, so the insurer declined the claim.
The Ombudsman put forward the case that the policyholder was not able to register the child before birth, but that a still-born child was covered. They said the company should pay out the claim, less the premium.
The insurer’s Response and the Stillborn baby –
The insurer’s response was that after the claim, three children were added to the policy. And so, the maximum number of additions in this area had been reached. The member did confirm that these were all her children.
The insurer went on to say that, for the child to be insured, they would have had to add it as a member. This would have to be done before death.
The Ombudsman reminded them that this would not have been possible and further advised that the claim was being viewed as valid. The policyholder told them about it as fast as possible.
The insurer then admitted to being in the wrong and settled on the basis the Ombudsman suggested.
If Only That Was All
When it came to paying out the claim, however, the insurer again refused to pay, stating that the stillborn child was the ninth child and so not covered.
As a result, the Ombudsman asked them to provide the dates on which the three children were added. This had been done on May 15th, 2012. The child who was still-born died on May 23rd, 2012.
Legally speaking, the company had acted according to their rights in this matter. The Ombudsman did, however, feel that the policyholder had been mistreated and that the situation was mishandled. They suggested making some sort of payment in the way of compensation.
The company paid the policyholder R5 000.
Finally, at the End of it All –
The upshot is that a still-born may be covered under your policy. Just make sure that you know what the rules and regulations are in this regard.
Had the policyholder only added two of the three children to the policy, in anticipation of the birth, the stillborn child would have been covered. He would then have been able to add the other child as well.
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