Examining the funeral benefit claims process: can we do better?
Funeral benefit solutions are usually value-adds in the funeral policy world, the most popular being the grocery benefit. This is meant to bridge the gap between the reality of losing a loved one, who is most likely also the policy holder, and the payout of any life insurance policy to the dependents.
For many South Africans that make up the lower income bracket, grocery benefits are a much-needed lifeline.
As we look at the funeral benefit claims process, we find ourselves questioning how helpful it is. Does it lessen the blow of death? Is the payout process and all the admin efficient enough to make a difference when all else seems lost?
Funeral benefit payouts and the policy claims process
In our research, we’ve established that most providers follow a similar claims process. Here’s what it looks like:
Beneficiaries must complete a claims form and provide the following documents:
- Certified copies of the policy holder’s death certificate and ID
- A certified copy of the beneficiary’s ID
- A completed DHA1663 form
- Bank account information of the beneficiary; in some cases a one-month bank statement is required
Once received, this information is then processed by the policy provider. In some instances, policy providers require these documents to be faxed. Should all documentation be submitted correctly, payouts should occur within 24 hours.
The South African reality
In our last blog post titled, “Are funeral cover benefit payouts creating more pain for the unbanked?” we took a closer look at the unbanked market in SA. We examined the impact of funeral policy benefit payouts and the requirement for beneficiaries to have bank accounts.
The reality is that approximately 4.3 million South Africans are unbanked. In an eventuality where the unbanked lose a bread winner, meeting existing claims requirements becomes a painful process for beneficiaries.
A glimpse of the future
At TuYu, we believe that we’re living in a time of unprecedented opportunity. Providing solutions to challenges like the one faced by the unbanked market, however, becomes more of a means to meet an urgent need than just an opportunity to capture a market.
We believe that mobile solutions can replace the existing funeral benefit payout process. In fact, much of the technology required to make processes such as the submission of important documents seamless and the immediate payment of grocery benefits already exists.
Today, mobile phone penetration is at an all-time high. More South Africans use mobile data, have Facebook accounts and email addresses than ever before. Leveraging mobile is therefore as simple as deploying the right technology and aligning it with existing claims process workflows.
Payouts can be administered in seconds to both feature phones and smartphones of beneficiaries, removing the requirement for a bank account or the process of creating one (travelling to closest bank, queuing, admin and minimum deposit) to receive a grocery benefit payout.
The increased safety of receiving grocery payouts via TuYu also outweighs the risky visit to an ATM, where many South Africans become victims of theft and card fraud.
The question is, will policy providers take the next step? Will they embrace mobile and create simpler and easier customer experiences, especially in the distribution of payouts at such a delicate time in the life of the beneficiary?