Thursday, January 22, 2009

The Date of Death

If you hold life cover in terms of a policy you own yourself, or your spouse or business partner owns a policy on your life, these are termed “personal policies”. Life cover payable on your death which is part of a pension fund group life policy is different. You don’t own that policy, because you are simply a member of a pension fund which happens to provide life cover. Should you cease to be a member of that pension fund, for example, on retirement or resignation, your life cover will cease.

Sometimes, the so-called “continuation option” allows you to continue to enjoy life cover if you effect a personal policy in the same amount of the group life cover, and pay the premiums yourself.

In a recent decided case, that of Vermaak v The Magistrate (Kuilsriver) (12024/2007 CPD), the deceased, a labour lawyer, had resigned from his employment with effect from 1st October, and knew that from that date he and his dependents would no longer be entitled to any risk benefits from the pension fund of which he was a member. Being determined to end his life, he tried to commit suicide on 29 September.

This was unsuccessful, and he spent the night in hospital. On the 30th, he was discharged, went home, and left again at around 10 pm that evening. His body was discovered the following day, on 1st October, and this was the date appearing on the death certificate. His suicide note made it clear that he was aware that should he die prior to midnight on 30th, his dependents would receive the relevant benefits.

The court considered not only the pathologist’s report but also various other indirect and circumstantial evidence and came to the conclusion that he had succeeded in his second attempt, and had died prior to midnight on 30th September. The only mistake he made, so found the court, was that he had not taken steps to ensure that his body was found before midnight.

The case illustrates who has the the burden of proof.

Claimants on life policies having a time-limit (the so-called ‘die-to-win’ policies eg term life policies or pension fund group life policies) will have to prove that the life assured died within the assured period. Claimants on endowment policies (‘live-to-win’) on the other hand might need to prove that the insured had survived to the maturity date.

What is important is that you should know the type of risk cover you have, the amount of cover and when it will be payable or not payable. A proper needs analysis should be done and your current provision compared with what you really need to ensure that your dependents are looked after.

Clive Hill
Financial Services Manager


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