Murder-for-money insurance cases nearly triple as calls grow for tighter controls - IOL
An allegation that a beneficiary was involved in a policyholder’s death does not in itself prove wrongdoing.
Life insurers detected 38 cases in which people were allegedly killed for insurance payouts in 2024, almost three times the number identified a year earlier, prompting calls for tighter controls over policies taken out on someone else’s life.
The 38 murder-for-money cases were up from 14 in 2023, according to figures from the Association for Savings and Investment South Africa cited by the National Financial Ombud Scheme (NFO).
While the cases represent a fraction of South Africa’s overall murder toll, they come against a backdrop of persistently high levels of violent crime.
The latest police statistics show 5,427 people were murdered between April and June this year, down 5.9% from 5,770 during the same three months last year. That equates to about 60 murders a day.
“However, 5 427 murders in 90 days remain 5 427 too many. Every death represents a life lost and a family devastated,” SANews.gov quoted acting National Police Commissioner Lieutenant General Puleng Dimpane as saying at the end of last month.
The NFO now wants the Financial Sector Conduct Authority to consider requiring insurers to obtain proof that a person has given informed consent before someone else can take out a funeral policy on their life.
It said this would ensure people knew insurance existed on their lives, who had taken out the policy and how much cover had been bought.
Denise Gabriels, lead ombud of the NFO’s Life Insurance Division, said practices across the industry were not uniform.
“A mandatory consent requirement would enhance transparency, strengthen consumer protection, reduce opportunities for fraud and abuse, and assist insurers in verifying the legitimacy of policies at inception,” she said.
The proposal follows more than a decade of reported cases involving people allegedly arranging or participating in the deaths of insured people to obtain insurance payouts. South African law prevents someone who intentionally causes another person’s death from benefiting through an inheritance or insurance payout.
South Africa's first-quarter crime statistics for the 2026/2027 financial year show a 5.9% decrease in murder cases, dropping from 5,770 to 5,427 compared to the same period last year.
However, an allegation that a beneficiary was involved in a policyholder’s death does not in itself prove wrongdoing, said the NFO. This can leave insurers facing the question of what to do with a claim while police investigate the beneficiary, it added.
The NFO will generally not rule in favour of a beneficiary who has not been cleared of suspicion while a police investigation or criminal case is under way.
The beneficiary can return to the ombud once the case has been finalised, including where there is a court verdict, charges are withdrawn or the National Prosecuting Authority decides not to prosecute.
But the NFO said criminal investigations can take years, potentially leaving innocent beneficiaries unable to access insurance proceeds. “It would be unjust for insurers and beneficiaries to remain in a state of uncertainty indefinitely while awaiting the outcome of a criminal investigation that shows little progress,” Gabriels said.
Where there has been an unreasonable delay, the NFO may require the insurer to decide the claim using the available evidence and the terms of the policy.
“This approach recognises that while public policy requires vigilance against fraudulent and unlawful claims, indefinite delays may also undermine the rights of innocent policyholders and beneficiaries,” Gabriels said.
