A troubling trend is emerging in the South African life insurance industry. Insurers say they are seeing more cases where people are allegedly killed so that someone else can collect a payout. The National Financial Ombud Scheme (NFO) has raised the alarm and wants stronger safeguards. Here is what has been reported, why it matters, and what could change. We have kept it simple, so it should be easy to follow.
What the numbers show
The Association for Savings and Investment South Africa (ASISA) says life insurers detected 38 cases in 2024 where a murder was allegedly linked to an insurance payout. In 2023, the figure was 14. That means the number of cases more than doubled in just one year.
These cases are often called “money for murder” cases. The term describes situations where a beneficiary is accused of arranging or taking part in the death of the policyholder. The motive alleged is access to the life insurance proceeds.
The word alleged matters here. The NFO has stressed that an accusation is not proof of guilt. Every case has to be tested by the proper authorities. That point comes up again later in this article.
Why the NFO is speaking up
The NFO is an independent body that helps settle disputes between insurers and their customers. Its Life Insurance Division handles complaints about life policies, including disputes over claims. Because of the rise in these cases, the division has asked for tougher industry standards.
Its main concern is easy to understand. In some cases, a person may have a policy taken out on their life without really knowing about it. If someone else holds the policy and stands to benefit, the risk of abuse goes up. The NFO believes a simple check at the start could close that gap.
The call for informed consent
The NFO wants insurers to get proof of informed consent from the person whose life is being insured. This would apply when someone else takes out the cover on that person’s life.
In practice, it would mean the insured person must clearly agree before the policy is issued. They would also need to understand what is happening. According to the NFO, the person should know three things:
- That insurance cover exists on their life.
- Who took out the policy.
- How much cover has been bought.
Denise Gabriels, the Lead Ombud of the NFO’s Life Insurance Division, said a mandatory consent requirement would bring more transparency and strengthen consumer protection. She added that it would reduce chances for fraud and abuse. It would also help insurers confirm that a policy is genuine from the day it starts.
A call for one clear set of rules
The NFO has not stopped at its own recommendation. It has asked the Financial Sector Conduct Authority (FSCA) to consider new conduct standards or regulations. The FSCA is the regulator that supervises how financial companies treat their customers. You can read more about its role on the FSCA website.
The NFO also pointed out that many insurers already have processes to check insurable interest and to prevent fraud. Insurable interest simply means that the person buying the cover has a real reason to protect the life being insured. However, the NFO said these practices are not always the same across the industry.
A single, consistent framework would make things easier for everyone. Insurers would know exactly what is expected of them. Customers would get the same level of protection, no matter which company they use.
What happens to a claim when a beneficiary is under suspicion
This part of the story is just as important. Some families are left waiting for money after a loved one dies. What happens if the beneficiary is also a suspect?
The NFO has set out a clear position. If a criminal case is opened against a beneficiary over the death of the policyholder, the NFO will not investigate that person’s complaint while the police investigation or court case is still active. The aim is to protect both the criminal process and the dispute process. The question of whether someone was involved in a death must first be dealt with by the right authorities. These include the South African Police Service (SAPS) and the courts.
While a beneficiary remains under suspicion and the case is ongoing, the NFO will generally not rule in their favour. It is a sensible approach. Nobody should receive a payout if they are later found to have caused the death.
Honest claimants should not be left waiting forever
The NFO also accepts that this approach cannot become a trap for innocent people. Criminal investigations can take years. Claimants often have no control over those delays.
Ms Gabriels explained that it would be unfair to leave insurers and beneficiaries in limbo while a case shows little progress. So there are exceptions:
- If the police investigation drags on for an unreasonable time, the NFO may require the insurer to assess the claim on its merits.
- If the police confirm that the beneficiary is not a suspect, the insurer may also have to assess the claim normally.
In both cases, the insurer would look at the available evidence and the terms and conditions of the policy. This is how families can avoid being stranded without answers for years.
The NFO also said that each dispute will be judged on its own facts. It will consider the evidence, the stage of any criminal investigation and the interests of other affected parties.
Why this matters to everyday South Africans
Life insurance is meant to protect families. It helps pay for funeral costs, replaces lost income and keeps households going after a death. Most policies are taken out for good reasons, and most claims are honest.
The rise in these alleged murder cases is still a worry, for three reasons. First, it points to real danger for some policyholders. Second, it puts pressure on the insurance system. Third, it could make claims harder or slower for honest families if insurers become more cautious.
Stronger rules around consent could help on all three fronts. A policy that the insured person knows about and agrees to is harder to abuse. It also makes things easier for insurers to check. That could mean fewer fraud cases and smoother claims for genuine beneficiaries.
Simple steps to protect yourself
The NFO has not issued a public checklist, but a few simple habits make sense for any policyholder. These are general suggestions, not official advice:
- Know your policies. Keep a record of every policy on your life, who owns it and who benefits.
- Read before you sign. If someone asks you to sign a form for a policy on your life, make sure you understand it. It should be easy to explain.
- Keep your documents safe. Store policy documents where a trusted family member can find them.
- Ask questions. If you are unsure about a policy, contact the insurer directly and ask for clarity.
- Use the right channels. If you have a dispute with an insurer, the NFO is the place to lodge a complaint.
What happens next
At this stage, the NFO has made recommendations. It has asked the FSCA to consider new standards or regulations, and the regulator will need to consult industry stakeholders. No new rule has been confirmed in the reporting so far. South Africans should watch for further updates from the FSCA and the wider insurance industry.
Final thoughts
The jump from 14 to 38 cases in a year is a serious signal. Insurers, regulators and the NFO all want to protect people from harm and to keep fraud out of the system. A mandatory consent requirement is a simple idea with the potential to make a real difference. At the same time, the NFO has been careful to say that allegations do not prove wrongdoing and that honest families must not be left waiting indefinitely.
Good insurance should give families peace of mind. Clear rules, honest claims and fair treatment help make sure it does.
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