Money & claims
Funeral Cover Scams and Your Rights
By Lindiwe Khumalo · 6 min read · Updated 24 June 2026
Funeral cover is the most-complained-about product at the National Financial Ombud, attracting scams and mis-selling - red flags include unregistered sellers, paying cash to an individual, vague documents and promises of huge cover with no waiting period at any age, and you can escalate disputes free of charge to the Ombud. Knowing the red flags and your rights protects you and your family from paying for cover that never pays out.
This guide covers the common scams and mis-selling tactics, why legitimate claims still get declined, and exactly how to use your rights and the Ombud if something goes wrong.
Common scams and red flags
Watch for unregistered sellers, pressure to pay cash or to an individual rather than a company account, vague policy documents, and promises that sound too good, such as huge cover with no waiting period at any age. Verify the insurer is registered and that premiums go to the company, not a person.
Mis-selling tactics
Mis-selling includes signing people up without explaining the waiting period, adding cover to airtime or accounts without clear consent, and selling unsuitable cover to vulnerable people. If you did not knowingly agree to a policy, you have the right to query and cancel it.
Why legitimate claims get declined
Even genuine policies decline claims for non-disclosure of health or age, lapsed unpaid premiums, or claiming during the natural-death waiting period. These are not scams, but they are avoidable. Disclose honestly, keep premiums paid, and understand the waiting period.
Your rights as a policyholder
You are entitled to clear policy documents, fair treatment, honest selling, and a proper claims process. You can cancel a policy you did not agree to, and you must be told the key terms before you commit. Keep all documents and proof of premium payments.
How the National Financial Ombud helps
If an insurer unfairly declines a claim or mishandles your policy, first complain to the insurer in writing. If it is not resolved, you can escalate free of charge to the National Financial Ombud, which investigates funeral-cover complaints and can direct the insurer to put things right.
Frequently asked questions
How do I spot a funeral cover scam?
Red flags include unregistered sellers, paying cash or to an individual, vague documents, and promises of huge cover with no waiting period at any age. Verify the insurer is registered.
Can I cancel a funeral policy I did not agree to?
Yes. If you were signed up without clear consent, you have the right to query and cancel it. Contact the insurer in writing and escalate if needed.
Why do legitimate funeral claims get declined?
Usually for non-disclosure, a lapsed unpaid policy, or claiming during the natural-death waiting period. These are avoidable with honest disclosure and paid premiums.
What are my rights as a policyholder?
Clear documents, fair treatment, honest selling and a proper claims process. You can cancel cover you did not agree to and must be told the key terms upfront.
How do I complain about a funeral cover claim?
Complain to the insurer in writing first. If unresolved, escalate free of charge to the National Financial Ombud, which handles funeral-cover complaints.
Is funeral cover really the most-complained-about product?
It is among the most-complained-about products at the National Financial Ombud, largely over declined claims and premium disputes. Knowing your rights helps you push back.
