Life insurance fraud in South Africa has become a deadly industry, where criminals manipulate weak systems and corrupt officials to profit from the lives—and deaths—of innocent people. This eight-part series uncovers the shocking truths behind these crimes.
It is a white collar industry worth billions of rands. It’s called life insurance but it should be called the death industry. It thrives on inventive ways of murdering people.
Mostly, people are “killed” on paper while they are still alive, unaware that someone has claimed money from a funeral policy for their false death.
Often, people are even murdered in cold blood so that the claim can be made.
The operators of these most evil of crimes hire mourners, steal bodies and even create non-existent people to kill them off and then claim the insurance money.
A Scrolla.Africa investigation has revealed the existence of a syndicate that not only steals money fraudulently but also engages in cold-hearted practices – and murder is not excluded.
Among the beneficiaries of the industry that thrives on funeral policy scams are fraudsters, hitmen, and the agents who sell the funeral policies.
This is possible because the industry itself is so negligent and lazy that the chances of prosecution are negligible and people are incentivised to kill their loved ones.
Companies like Old Mutual, Avbob, 1life insurance, Absa Instant Life Cover, Capitec Life Cover and many others are targeted by fraudsters who put forward fraudulent claims.
Elton Nkomo investigates fraud within the funeral policy sector. He told Scrolla.Africa that tough competition in the industry has led funeral policy companies to adopt lax measures in the chase for clients. This has opened cracks in the industry that criminals have taken advantage of.
Nkomo said signing up for a life insurance policy is as easy as picking up a phone and giving a consultant a call.
“What the consultant wants is an identity document number or date of birth for the person being insured. That’s all,” he said.
This means that if a stranger knows your date of birth, they could, with very little effort, put you on a funeral policy – and then later kill you and claim the payout for your death.
Nkomo said a person is allowed to take out as many policies as they want as long as they pay the premiums.
“Most companies do not restrict premium holders to put several people on policies with no questions asked,” he said.
“There are no security checks in place for anyone to find out whether the person who is being put on a policy is related to the policy holder or not.”
He said the competition among the companies in the “death industry” is big and brutal.
“The more policyholders a consultant gets to join, the more commission they make,” he said. “There is no time for verification of any sort about who is taking out the policy, how many policies they already have and how many policies can be taken out on one person.”
There are many gaps for the criminals to exploit.
Nkomo said in his experience of investigating false funeral policy claims, he has seen a growing trend of fraudsters making easy money.
He confirmed that the industry has a lot of cracks.
“There are no checks and balances to investigate policy holders by the companies,” he said.
Mlungisi Mhlangabezi Dlokweni, a former police detective and the owner of Dloks ‘n Dloks Risk Solutions, said the question most frequently asked by the consultant is how one is related to the person on whose life the policy is taken out.
“After this short question-and-answer session, which usually happens over the phone, an insurance policy is registered with or without the knowledge of the insured person.
“One person could be insured on as many policies from different companies as one would wish for and can afford the monthly premiums,” he said.
Dlokweni said different syndicates are well coordinated and connected with different service providers, both in government and the private sector, that make it easy for an individual to claim millions of rands fraudulently.
“Fraudsters have connections within the police, mortuary officials, the Department of Home Affairs, the South African Social Security Agency (Sassa) and even professional doctors.”
They even have their own shops where they make fraudulent documents like birth certificates, death certificates and other documents that aid them in getting the money easily from insurance companies.
On 18 May this year Gauteng police arrested three suspects who were found in possession of fraudulent documents that included birth certificates, death certificates, university and college certificates and false identity documents.
Gauteng police spokesperson Lieutenant Colonel Mavela Masondo said the suspects have been committing fraud and corruption along with Home Affairs officials by unlawfully producing various personal documents in an apartment in Marshalltown in the Johannesburg inner city.
“They make all the documents they need to commit the crimes,” said Masondo.
“Police found five males working on laptops and desktops, printing documents which were later identified as death certificates, birth certificates, and other Home Affairs documents. Police also found the green identity documents marked deceased, passports, and temporary ID documents.”
Scrolla.Africa also broke the story of a similar syndicate arrested in Hillbrow on 14 April 2022.
Dlokweni said the entire chain from different departmental officials and fraudsters hugely benefits from the process and they work together as a well-coordinated, well-oiled and unstoppable machine making a killing.
Dlokweni said killings, the collection of unknown corpses and the hiring of bodies are some of the tactics dominating the industry that fraudsters use to claim and rake millions of rands from big companies.
Scrolla.Africa is exposing South Africa’s deadly life insurance fraud industry in this eight-part series, inspired by Everson Luhanga’s explosive investigation into serial killer cop Rosemary Ndlovu. Missed it? Go read the full series now.
Stay tuned for part two of the death industry series coming soon.
