- Life insurers uncovered 38 murder-for-money cases in 2024, a steep rise from 14 cases in 2023.
- The Financial Ombud will not look into complaints from beneficiaries while they are still suspects in criminal cases.
- The Ombud is urging the FSCA to require proof of informed consent before any policies are taken out on someone else’s life.
The National Financial Ombud (NFO) has raised concerns about the growing threat of murder-for-payout schemes in South Africa’s life insurance sector. The Ombud is calling for stronger safeguards to prevent people from secretly taking out policies on someone else’s life.
The Association for Savings and Investment South Africa (ASISA) reports that life insurers detected 38 murder-for-money cases in 2024, compared to just 14 in 2023. This jump highlights a sharp increase in insurance-related crime.
Denise Gabriels, Lead Ombud of the NFO’s Life Insurance Division, said the Ombud has a clear position. “We will not investigate a beneficiary’s complaint while that person is the subject of an active police investigation or is facing criminal prosecution relating to the insured’s death,” she explained.
“If investigations drag on without good reason, or if police confirm that the beneficiary is not a suspect, insurers may be required to assess claims on their merits rather than leave families in limbo.”
Criminal cases take priority
The NFO says that beneficiaries have to wait until criminal proceedings are finalised before their complaints will be considered. This means waiting for a court verdict, the withdrawal of charges, a decision not to prosecute along with a certificate of nolle prosequi, or some other final legal outcome.
The Ombud explains that this approach protects the integrity of both the criminal justice system and the complaints process, while recognising that allegations alone do not prove guilt.
Delays should not leave families in limbo
Gabriels says lengthy investigations shouldn’t leave insurers or innocent beneficiaries facing endless uncertainty.
“It would be unfair for insurers and beneficiaries to remain stuck in uncertainty indefinitely while waiting for a criminal investigation that isn’t making progress,” she said.
When criminal proceedings are unreasonably delayed, the NFO may require insurers to assess claims based on the available evidence and the terms of the policy.
Stronger safeguards before policies are issued
The NFO is urging the Financial Sector Conduct Authority to introduce a mandatory rule that insurers must get proof of the life assured’s informed consent before issuing any life or funeral policy on that person.
Gabriels said, “Making consent mandatory would improve transparency, strengthen consumer protection, reduce the risk of fraud and abuse, and help insurers verify that policies are legitimate from the start.”
The Ombud believes a standard regulatory framework would boost accountability and strengthen public confidence in South Africa’s life insurance industry.
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