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This document aims to describe, but not evaluate, microinsurance products being offered, and relies on information provided by our partners. As
in various stages of testing their performance and value
subject to change. For more information on the context in which the product is offered, please refer to the partner's profile and learning journey.
any comments about the product or the project overall section on the learning journey page.
Name of the product
Name of the company
Type of company/organization
Legal license (for formal insurers only)
Risk covered
Country
to describe, but not evaluate, microinsurance products being relies on information provided by our partners. As the products may be
testing their performance and value for clients, they can be For more information on the context in which the product is please refer to the partner's profile and learning journey. Please include any comments about the product or the project overall in the "add comment" section on the learning journey page.
Name of the product
Burial Society Support Plan Group Funeral SolutionName of the company
Old MutualType of company/organization
Commercial InsurerLegal license (for formal insurers only)
LifeLife
South Africa
to describe, but not evaluate, microinsurance products being the products may be for clients, they can be For more information on the context in which the product is
Please include d comment"
Burial Society Support Plan (BSSP) and Group Funeral Solutions (GFS)
Product description
Type of product Funeral
Coverage description in detail, including the
purpose of insurance The purpose of the coverage is to provide funds for funeral expenses. In the case of accidental or natural death, members have the following cover:
• Cover for the principal member is a multiple of R1000, with a minimum of R3000 and maximum of R12000. The coverage amount is chosen by the burial society and is the same for all members. • Cover for the principal member’s spouse
(max 1) will be the same as for the principal member.
• Cover for children will be the following multiples of the cover on the principal member:
• from age 14 to age 21: 100% • from age 6 to age 13: 50% • younger than age 6: 25% and
• stillborns : 10%
• Cover for adult dependants can be either 100% or 50% of the principal member’s cover. ”Adult dependants” covered can include between 2-5 people who are financially dependant on the principal member.
• Cover for children over 21 can be extended to age 26 for full-time students, or for life if physically or mentally disabled and fully dependent on the principal member. • The burial society makes the choice as to
whether coverage is offered to individual members only, members plus immediate family, or members plus immediate family and Adult Dependents.
Benefits / Sum insured of the product See above
Additional non-insurance services bundled with the product
Additional benefits from a contracted service provider (Family Support Services), include: Repatriation of body, including transportation expenses
Access to legal advicevia a telephonic service. Access to ambulance services in case of accident
Terms and conditions
Insured All principal member s and selected dependents (multiple lives ) of the burial society. The burial society is the policyholder (group policy coverage).
Term length of the policy No defined term; premium/rate reviews are performed annually and policyholder has right to cancel if not acceptable; premium payments are paid monthly; either side may cancel upon 3 months written notice; OM has right to cancel upon non-payment of premium (15 days grace period)
Eligibility criteria (age limits, health limitation etc…)
Be a member of a burial society with a minimum of 20 members
Members have to be South African citizens or residents
Age limit at registration: 100
Key exclusions (if any) No exclusions
Deductible/Copayment NA
Waiting period (in number of days) for coverage to begin
For principal coverage amounts of 3000-5000, the waiting period is 3 months. For principal coverage amounts of 6000-12000, the waiting period is 6 months.
Accidental death is covered during the waiting period. Suicide is not considered accidental death and is subject to waiting period.
OM has the right to waive waiting period for a group based on previous coverage and/or experience.
Ceiling (if any) of the benefits Max coverage is R12 000. Max payment for one death under all OM policies is R25 000.
Renewal (and requirements if any) See above under policy term.
Insurance policy documentation to be provided at registration
ID number of all covered lives
A declaration of financial dependence will be required for adult dependent
Premium
Premiums price (either amount or rates) BSSP: flat rate for all members of the group, depending on level of coverage and family options selected by group, as well as underwriting criteria for large groups.
• Single member: R 3.60 • Core Family: R 6.60 • Adult dependent: R 3.40
GFS: Age- banded rates, dependent on level of coverage and family options chosen by group. Core Family rates per R 1000 of coverage: 16-64: R 4.70
65-74: R 10.10 75-84: R 16.00 85-100: R27.70
All rates quoted above are monthly.
Currency South African Rand: USD 1 = R 6.78 ( 22.07.2011)
Average premium / beneficiary / month (in local currency)
Average premium = R 81 per member per month (note this is per member not per covered person)
Payment frequency Monthly
Premium subsidized by donors or government (i.e. part of the premium cost is paid to the risk carrier by donor / government on a regular basis)
No
Description of subsidy(ies) type(s) NA
Other financing mechanism (cross subsidizes across product lines, target population, co-payment between employee and employers) used (if any)
Group rating
Premium collection method Bank account (from the burial society) – direct payments (stop orders)
Target Market
Description of target population Rural, Urban, Peri-urban
Rural Peri-Urban Urban
Approximate percentage of the total number of people covered who work in the informal sector
information not available (no detailed member-level data)
Approximate percentage of the total number of people covered considered as poor (living on less than 2 USD/day)
not available
Type of product (voluntary or compulsory) Voluntary at burial society level
Compulsory for all members of the society
Product launch date May 2003, revised 2006, rate revisions in 2009/2010, and also expected in 2011/2012
Number of active policies as of June 2011 2296 policies (burial societies or groups)
Number of active beneficiaries as of June 2011 94,000 principal members, which equates to approximately 470,000 covered individuals (assuming each member covers 5 people)
Claims
Claims declaration process Meet with the sales consultant
Documentation required for claim ID of principal member and deceased person Death certificate
Certificate from Home Affairs (confirming identity)
Payment method Bank account deposit (on burial society account)
Technology
Technological products used NA
Processes automated through technology NA
Distribution
Distribution partner (by order of business size) N 1
Informal groups (saving groups, welfare groups): burial society
Other information
Main challenges faced in selling/managing this product
Long sales process, especially for larger groups that require actuarial quotes from head office
High competition in the market and price pressure High lapses
Expensive distribution system
Lack of system for self-administration to break into the market for larger groups/funeral parlours
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