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When life insurance for HIV-positive people goes wrong


When life insurance for HIV-positive people goes wrong

Insurer changed policy from comprehensive to accidental cover, allegedly without properly informing client


A family has been left destitute after the death of their matriarch and breadwinner despite her having taken out a life insurance policy she hoped would provide for them after she died.
The family has approached the insurance ombudsman in a bid to recover the payout they believe is due to them. They say their story is a warning to people who believe they are covered in the event of their death.
The insurer, however, insists it has done nothing wrong.
Thembeka Tikolo, 50, died of renal failure on October 9 2018, leaving behind four children and two small grandchildren. She was the sole provider for her family living in Mdantsane, Eastern Cape.
Before her death, Tikolo took out life insurance with AllLife for comprehensive cover.
She was living with HIV and diabetes and her health was failing. The policy, she believed, would ensure her dependants could complete their education when she was gone.
But when she died her family discovered her policy had been changed to an accidental death policy and she was not eligible for a payout because she died of natural causes.
Her cousin, Tebogo Tsaeng, who paid her insurance, said she would never have agreed to accidental death cover if she had known what it meant.
The insurer has rejected this, saying Tikolo understood the conditions of the policy she had taken out.
Tsaeng has filed a complaint with the Ombud for Financial Services Providers to get the money he says is owed to the Tikolo family.
The ombud said the code of conduct for authorised financial service providers and representatives was clear that “when a financial service provider renders a financial service, the representations made and information provided to a client must be … provided in plain language so as to avoid uncertainty or confusion and not be misleading”.
In 2005, AllLife was the first company in the world to offer life cover to people living with HIV.
Tikolo first took out comprehensive life insurance on May 15 2017, for a sum of R100,000 with a premium of R270. As part of the underwriting process she had to undergo medical tests. After her tests results were reviewed, AllLife amended Tikolo’s policy to accidental cover only.
In a written response to Times Select, AllLife said: “The results ... from these tests showed that Tikolo had significant impairment and damage to her kidneys. It was for this reason that we were not able to continue the benefit on full cover, the results were discussed in detail and Tikolo was offered accidental death cover.”
The policy amount was amended to R350,000 at a premium of R220.
After seeing a transcript of the conversation between his cousin and the insurance consultant, Tsaeng believes the company took advantage of Tikolo’s lack of understanding of the policy, and he claims the company took her money knowing full well that the likelihood of her dying from an accident was slim.
In a complaint to AllLife, seen by Times Select, Tsaeng argued that the financial service provider spoke to his cousin in English despite her request to be spoken to in her home language, Xhosa. He also argues that the term “accidental coverage” was not explained to her. “It is immoral what they did and I wonder how many other poor people have fallen victim to their trap,” he said. “This serves as a warning to other people who think they may be covered in full.”
Tsaeng said he now had to take financial responsibility for Tikolo’s six dependants despite not being in a financial position to do so.
Marc Alves, team resolution manager at the Office of the Ombud for Financial Services Providers, said Tsaeng’s case had not yet been reviewed by the ombud.
But, Alves said, according to the code, the financial service provider must not only tell prospective clients that they are covered for accidental benefits, “but an explanation of what would be considered accidental, what is excluded in terms of this benefit”.
“In addition, the FSP must make full and frank disclosures of any information that would reasonably be expected to enable the client to make an informed decision.”
Simone van Niekerk, speaking on behalf of AllLife, said the company pulled all transcripts with Tikolo and Tsaeng and had them reviewed by three different members.
“We are confident Tikolo was well informed post underwriting that the policy had been limited to accidental cover. During this engagement Tikolo was advised that the premium would be reduced and the cover amount increased. Tikolo was asked specifically on the call, that because her policy is paid for by Tsaeng, to inform Tsaeng of this change to benefit, cover and premium, and Tikolo confirmed she would.”
According to Van Niekerk, Tsaeng had asked consultants to speak to Tikolo in Xhosa.
“During the pre-qualifying, sales and initial underwriting engagements we conversed with Tikolo in Xhosa. Once we received the medical and blood results, our post-underwriting consultant contacted Tikolo to discuss the results and adjustment to benefits, cover and premium. Tikolo, at the time, did not specifically request for the consultant to engage in Xhosa. This engagement continued in English,” she said.
She said they were confident Tikolo understood the policy adjustment after a review of the engagement.
“Given the significant impairment and damage of Tikolo’s kidneys, this [the accidental cover] was the only product we could offer.”

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