Diaspora Insurance is a regulated company, regulated by the Financial Conduct
Authority(FCA) here in the UK. We offer a funeral plan which allows a person to cover
themselves here in the diaspora and cover their relatives back home or anywhere in the
world with the aim of giving them peace of mind and guaranteeing them a dignified
send-off. However, Diaspora Insurance does not allow a person to cover only their
parents or relatives on the funeral plan instead they should also be part of the funeral
plan. We are guided by various concepts of insurance and all insurance companies are
governed by the same principles and is it a requirement from the regulator that the
principal life is also on the same funeral policy.
The aspects that we are basing on are as follows:
1. Insurable Interest
Insurable interest means you will face a significant emotional, financial, or other types of
loss that will negatively impact you upon the insured's death. Insurable interest must exist at the time the funeral policy is purchased.
A person will have an insurable interest in the life of another person when the death of
that person would cause the surviving person a financial loss. Diasporans are considered
back home as the breadwinners and in the event of death they are looked upon to cover
the whole funeral so having a policy for yourself here and including your loved ones back
home helps one manage the financial loss that comes with a funeral of a loved
one. Immediate family members such as a spouse, children or even ageing parents
would usually automatically qualify as having insurable interest since they may rely on
you financially. Insurable interest prevents the moral hazard of an individual buying a
funeral policy for their parents or relatives in general and then arranging for the
occurrence of insureds death to profit from that death. When an individual only covers
their parents on the cover and they are not included, from the insurable interest point of
view and the regulatory point of view this creates a not-so-good business practice
meaning.
2. Money Laundering and fraud
Money laundering is the practice of disguising money that was gained through criminal
means, to look as if it came from a legitimate business activity. The ways that one can
launder money using an insurance policy are:
-Purchasing a funeral insurance policy for someone, then making a claim soon
after.
-A customer who wishes to fund its policy using payments from a third party
– Premiums being paid into one policy, from different sources
-Making over-payment on a policy, then asking for a refund
-Where the relationship between the policyholder and beneficiary seems unusual.
A very good recent example is the case of a South African-born woman Rosemary
Ndlovu who is a former police officer, she is serving six life sentences after being
convicted in October 2021 on charges that include murder, attempted murder, defeating
the ends of justice and fraud. She collected more than R1-million in insurance pay-outs
after killing several relatives and a former boyfriend.
3. Direct Debit Guarantee
The Direct Debit Guarantee applies to all Direct Debits. It protects the client in the rare
event that there is an error in the payment of the Direct Debit, for instance, if a payment
is taken on the incorrect date, or the wrong amount is collected. It cannot be used to
address contractual disputes between the client and the billing organisation. As part of
treating our customers fairly (TCF) culture Diaspora Insurance offers clients a direct
debit guarantee. This means that if the billing organisation has made an error in the
payment of a direct debit, the client must be paid a full and immediate refund.
Clients however do breach the DD guarantee if allowed to cover other people in the
policy and exclude themselves in the funeral policy.
4. Utmost Good Faith
Utmost Good Faith is one of the principles of insurance also known as Uberrima Fides
which is the Latin term for an insurance contract. This means that both the client and the
insurer must disclose all material facts such as pre-diagnosed medical conditions, history
of illnesses in the family, and other relevant details.
However, as Diaspora Insurance we are a no medicals policy, and we face the risk of
people covering the ones that are at high risk thus we require the principal life to be
covered first then add their loved ones under their cover. Furthermore, we apply a
waiting period for natural death as a risk mitigation tool.
5. Diasporans are the target market
The bespoke Diaspora Funeral Cash Plan is designed first and foremost for the diasporas.
Adding family members back home is one of the benefits of the product. Therefore, a
diasporan has to cover themselves first before they can add other co-lives.
In conclusion, it is important to protect yourself first as the saying goes’’ charity begins
at home”, meaning you must ensure you protect yourself before protecting anyone else.
A person’s first responsibility is for the needs of their own then nucleus and extended
family next, to prevent creating a burden once they are gone.