More than R65bn in unclaimed insurance for investment and funeral policies is waiting to be claimed according to Alan Ipp, managing director of Springpoint Finance.
He says pension funds alone are holding an estimated R150m in unclaimed pensions and provident funds.
These funds remain unclaimed because consumers have either failed to notify insurance companies of a change of address, forgotten about it, or don't know about the policies - or the money is tied up in estate.
Sometimes, it is the red tape involved and through just a sheer lack of resources that companies can't trace the policies of the deceased estates.
Another root cause of the problem, is that clients allow a policy to lapse, says Ipp. "Often people are unaware of the value of their policies and they feel they are not losing anything if they simply stop paying due to financial pressures," he says.
During the first half of 2011, lapsed policies totalled R2.5m. Policies worth R1.3-m lapsed in their first year while those lapsing in the second year were worth R1.2m.
Ipp says these statistics are startling and something needs to be done in the insurance sector to put money back into the pockets of policy-holders.
"Until recently it has been difficult, if not impossible, for consumers to access their policy details. The long-term nature of insurance policies mean people often misplace the policy documents and even forget which company they bought them from. This has been a huge contributor to lapses," he says.
Ipp has launched VeriFi, a website that gives policy-holders the ability to download a comprehensive report on all their policies.
By using the VeriFi portal, policyholders can evaluate how their investments are performing or whether they have made adequate provision for the future.
The VeriFi internet service provides policyholders with a full report on all the policies they have bought locally from all the major life assurers, whether they are still in force, have lapsed or matured without the proceeds being claimed.
Ipp says until now, policyholders who wanted to check on the status of their policies but did not have access to a financial adviser, had to contact every one of their insurance companies individually either by phone or in writing.
"Because it is such a cumbersome process, many people don't get round to it and as a result lose track of their policies. Policies would mature without the holders being aware of it, or they would lapse because the policy owners did not provide the insurance companies with new debit order details when they changed banks," he says.
Source: Sowetan via I-Net Bridge
