A rise in detected cases in which people allegedly seek to profit from the death of an insured person has prompted South Africa’s financial ombud to call for tighter safeguards in the life insurance industry.
The NFO’s Life Insurance Division has raised concerns about so-called “money-for-murder” cases, in which beneficiaries are accused of arranging or participating in the deaths of policyholders to access insurance payouts.
According to the Association for Savings and Investment South Africa (Asisa), the industry body representing the country’s asset management, collective investment, life insurance and related savings and investment sectors, life insurers detected 38 murder-for-money cases in 2024, up from 14 in 2023.
The figures do not however represent a national count of insurance-related murders, nor do they establish how many cases involved spouses or romantic partners. They are cases detected and reported by Asisa members.
Nevertheless, the increase has drawn attention to the safeguards surrounding policies taken out on another person’s life.
A sharp rise in detected cases
Asisa’s 2024 figures showed that 38 of the 5 505 fraudulent and dishonest life insurance claims detected by its members were classified as murder-for-money cases.
Of those 38 cases, 36 involved funeral policies and two involved life policies. Insurers prevented an estimated R6.6 million in potential losses linked to the cases, while the actual loss was R380 000.
In 2023, insurers detected 14 murder-for-money cases. Actual losses amounted to R1.8m, while R2.1m in potential losses was prevented.
Murder-for-money cases therefore accounted for a small proportion of detected insurance fraud. Their significance lies in the possibility that financial gain may have been linked to the alleged killing of an insured person.
The broader fraud figures also underline the scale of the challenge facing the industry. Asisa members detected 16 520 cases of fraud and dishonesty across the life insurance and investment industry in 2024. The industry reported that it prevented fraud and dishonesty worth R1.4bn, while actual losses amounted to R131.6m.
Asisa has said its Forensic Standing Committee established working groups to examine ways of reducing the risk of criminals exploiting funeral insurance for financial gain.
When insurance becomes part of a murder case
South Africa has seen high-profile cases in which insurance payouts became part of the prosecution of people accused of killing those whose lives were insured.
One of the most prominent is that of Nomia Rosemary Ndlovu, who was convicted of murdering six people, including relatives and her boyfriend. She was found to have taken out insurance policies on some of the victims and received more than R1.4 million in payouts following their deaths.
In another case, Eastern Cape pastor Melisizwe Monqo, his wife Siphosihle Pamba and a hitman were convicted over the murder of Hlompho Mohapi. Two life policies worth R3 million and R200,000, as well as a funeral policy, had been taken out on Mohapi’s life. The court heard that she was unaware of the R3 million policy.
These cases are separate from the 38 cases detected by insurers in 2024 and do not establish that all of those cases involved killings. They illustrate, however, the type of risk behind the NFO’s call for stronger safeguards when insurance is taken out on another person’s life.
When a beneficiary faces a criminal investigation
Denise Gabriels, lead ombud of the NFO’s Life Insurance Division, said the ombud had adopted a firm position where a beneficiary faced criminal allegations relating to the death of the insured person.
If a criminal case is opened against a beneficiary, the NFO will generally not investigate the beneficiary’s complaint while the police investigation or criminal proceedings remain active.
“At the same time, the NFO cautions that justice delayed must not become justice denied.
“Where probes drag on unreasonably, or where police confirm that the beneficiary is not a suspect, insurers may be obliged to assess claims on their merits rather than leave families stranded in uncertainty,” she said.
Where a beneficiary has not been cleared of suspicion concerning the death of the life assured, the NFO will generally refrain from making a ruling in the beneficiary’s favour while the matter is under investigation by the South African Police Service or before the courts.
The beneficiary may return to the NFO once the criminal matter has been finalised, whether through a court verdict, the withdrawal of charges, a decision by the National Prosecuting Authority not to prosecute and the issuing of a certificate of nolle prosequi, or another final resolution.
The approach is intended to protect the integrity of both the criminal justice system and the complaints process by avoiding a situation in which the two processes reach conflicting conclusions.
Justice delayed cannot mean justice denied
The NFO’s position is not that an insurance claim should remain frozen indefinitely simply because a criminal investigation has been opened.
Gabriels said the NFO was mindful that criminal investigations and prosecutions could sometimes take years to conclude, leaving beneficiaries in prolonged uncertainty.
“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.
“Accordingly, where there has been an unreasonable delay in finalising the criminal matter, the NFO may require the insurer to assess the claim on its merits based on the available evidence and the terms and conditions 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.
Each case will nevertheless be considered on its own facts, including the available evidence, the status of the criminal investigation, the interests of other affected parties and the requirements of fairness.
The NFO’s approach is based on a distinction between suspicion and proof. A beneficiary’s financial interest in an insurance policy does not, by itself, establish involvement in the death of the insured person.
The public-policy principle
The cases also raise an established legal and public-policy principle: a person should not be allowed to benefit financially from his or her own unlawful conduct.
Where a person intentionally causes another person’s death, the law does not generally allow that person to profit from the death through an inheritance or insurance payout.
But an allegation is not proof of criminal conduct.
The NFO’s approach therefore seeks to balance two considerations: protecting the integrity of the criminal justice process while ensuring that beneficiaries who are not implicated in wrongdoing are not left indefinitely without an answer on their claims.
Call for proof that the insured person knew about the policy
The NFO is also calling for greater emphasis on prevention.
One of its proposals is that insurers should be required to obtain proof of the life assured’s informed consent before issuing a policy taken out on that person’s life by someone else.
The proposed safeguard would ensure that people know insurance cover exists on their lives, understand who has taken out the policy and are aware of the extent of the cover.
“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.
“While many insurers have processes aimed at confirming insurable interest and preventing fraud, industry practices are not always uniform. The NFO believes that a consistent regulatory framework would improve standards across the industry and promote better outcomes for consumers,” Gabriels said.
The NFO believes the Financial Sector Conduct Authority (FSCA), in consultation with industry stakeholders, should consider introducing conduct standards or other regulatory requirements requiring proof of informed consent before a policy is issued on another person’s life.
Why funeral policies are in focus
The Asisa figures put funeral policies at the centre of the concern.
Of the 38 murder-for-money cases detected in 2024, 36 involved funeral policies, while two involved life policies.
Asisa has said the industry wants funeral cover to remain accessible while reducing opportunities for criminals to exploit it.
The association has also pointed to data-sharing initiatives and forensic investigations as tools insurers use to identify suspicious activity. However, establishing sufficient evidence to support a criminal prosecution can take considerable time.
This creates a difficult balance for insurers. Suspicious circumstances may warrant further investigation, but suspicion alone cannot establish criminal responsibility.
A wider fraud problem
The murder-for-money cases formed part of a much broader pattern of fraud and dishonesty identified by the industry.
Asisa members detected 16 520 cases of fraud and dishonesty in 2024, compared with 13 074 in 2023. Fraudulent and dishonest life insurance claims increased from 4 130 to 5 505 over the same period.
At the same time, the industry continued to pay legitimate claims on a large scale. Asisa reported that life insurers paid R639bn in claims during 2024 and settled 95.6% of death claims received during the year.
The figures highlight the challenge facing the industry: stronger controls are needed to prevent fraud and criminal abuse, but those controls must not unfairly obstruct legitimate claims.
Closing the gap before a policy is issued
For the NFO, requiring informed consent could address one potential vulnerability before it develops into a claims dispute.
If a person knows that a policy has been taken out on his or her life, the existence of the policy, the identity of the policyholder and the amount of cover are no longer hidden from the insured person.
The proposal would also give insurers an additional verification step when a policy is issued, rather than relying primarily on investigations after a suspicious death or claim.
The NFO’s call now puts the issue before the FSCA and the broader insurance industry: whether proof of informed consent should become a consistent regulatory requirement for policies taken out on another person’s life.
THE NATIONAL