How does Funeral insurance work if your job exposes you to Aids?

Let’s look at a case that crossed the Ombusdman’s desk, funeral cover and Aids.

A nurse, working at a healthcare facility, took out funeral cover for herself and her partner. When she died, her death certificate listed the cause of death as Aids.

It is assumed that she contracted the disease during the normal course of her duties. However, the insurer refused to pay the claim on the basis that the Aids clause, where you have knowingly put yourself at risk of contracting the disease. cancelled the cover

If you work in a high-risk job such as nursing, you must register with the Nursing Council or the SA Medical and Dental Council. The deceased was not and so the claim was not valid.

The Ombudsman did, however, feel that even with the wording of the policy, the insured may have been misled. She thought she would be covered as Aids care was part of the normal course of her duties.

She had a reasonable expectation of cover and, as a result, the Ombudsman said that the insurer should make a goodwill payment of around R1 500 to the beneficiary. They subsequently agreed to this and paid the money to the deceased’s partner.

Funeral cover and Aids – Part two

Funeral cover and AidsThat’s not quite all that happened. Upon investigation, it was found that the policy had been cancelled. The insurer said that this was as a result of the initial claim being declined. The partner, therefore, had no cover.

The Ombudsman then highlighted the clause in the policy that stated it would become paid up after the death of the main member. This was read to mean that the partner would remain insured with no more premiums owing.

The company agreed. Not long after though, they tried to invoke the HIV/Aids exclusion clause. The Ombudsman found that the clause could be taken more than one way.

  • If either of the insured tested positive for Aids when a claim was made, the policy terminates. This would also happen if tested positive before making a claim
  • If one of the insured tested positive for Aids at the time of death, the funeral cover would not pay out. The other party should only lose cover if they had also tested positive.

So, the terms within that clause were at odds. The Ombudsman ruled that the second reading of the clause was the fairer of the two. They said that the second applied in this case.

What happened Next –

The insurer finally confirmed that they had made the policy paid up. This meant that the husband retained his cover.

And the Moral of the Story?

Don’t rely on the information being given to you by the person trying to sell you the policy. Read the fine print carefully and make sure you comply with it.

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