Ombudsman reveals SA's most problematic financial products

Published on 4 October 2010

by In-house Writer

Last week's financial ombudsmen conference revealed the financial products and services that are creating the biggest headaches for consumers. The 'usual suspects' included property syndication schemes, plans for accessing retirement savings early, as well as poorly explained or ill clarified credit life insurance products.

At the conference, the Ombud for Financial Services Providers, Noluntu Bam, outlined the typical issues culminating in consumer complaints across a range of financial services.

Credit life insurance issues

Personal Finance has cited Bam as saying that this type of life insurance has been the cause of a large number of complaints to her office. Poorly explained policy exclusions, and those relating to pre-existing conditions in particular, are causing the biggest issues for consumers.

Complaints have also been lodged in relation to non-disclosures relating to benefit limitations and when benefits become effective. More disturbingly, the ombudsman has received numerous reports of life insurance products being sold in an exploitative way, with charges poorly explained and affordability not adequately taken into account.

In order to avoid claims issues it is therefore critical that policyholders seek clarification about the exact nature of benefits, policy exclusions and potential holding periods applying to pre-existing conditions.

Read more South African life insurance news here.

Resource: Personal Finance