The Association for Savings and Investment South Africa (Asisa) says forensic department reports from life insurance companies indicate a rise in people buying or renting dead bodies in order to obtain fraudulent death certificates.
Statistics show that last year 1,915 funeral claims were rejected by life insurers with a total value of R176-million, of which, 1,127 were rejected because of fraudulent documentation.
Criminals take out funeral cover for people who do not exist.
They then obtain death certificates using dead bodies that they've rented or bought before submitting a claim.
Another 156 fraudulent claims showed syndicate involvement and in seven cases beneficiaries were found to have caused the death of the policyholder.
Donovan Herman, convenor of the Asisa Claims Standing Committee said funeral policies requires no blood tests and medical examinations and were designed to pay out quickly in the event of death.
“Unfortunately, this makes it tempting for criminals and dishonest individuals to take out funeral cover for people who do not exist with the intention of later submitting claims using death certificates issued for dead bodies rented or bought for the purpose of committing fraud,” said Herman.