Following on from our last blog post about long-term insurance, here are some points to keep in mind when taking out a funeral policy:

• Make sure that the salesperson you are dealing with has a licence from the Financial Services Board to sell insurance by asking them to show you their licence.
• If the funeral policy is administered and sold by a third party funeral administrator, make sure you know who the insurer is who underwrites the risk.
• Be accurate and honest when you fill in the application form. The insurer can cancel the policy and not pay your claim if they find out that you did not disclose material information on the form.
• Be aware that you have the right to receive the policy or a policy summary when your application is accepted.  Insist on seeing it.  Read it and make sure you understand it, failing which phone and find out what it means.
• Make sure that your premiums are paid every month on time, even if you are paying by debit or stop order, and keep proof of your payment.  If the premium is not paid the policy may be terminated and a claim may be refused.  There is a grace period (15 days or longer depending on the policy) after the due date when cover continues, but after that no benefits will be paid.
• If you have any dealings with a salesperson, the administrator or the insurer, keep written proof of the dealings.
• Make sure that any beneficiary nominations (where you nominate the person who must receive the benefits on your death) are up to date and still reflect your wishes.
• When a life assured (the person whose death is covered by the policy) dies, the claimant must submit the claim as soon as possible.  Check in the policy how much time there is for a claim, because if the claim is late the insurer may refuse to pay it.
• If a claim is refused for any reason the insurer or administrator is obliged to give you its reasons in writing.
• Be aware that the Ombudsman for Long-term Insurance resolves disputes between insurers and policyholders.  If you are not able to resolve a complaint with an insurer then you can write to the Ombudsman.

Judge Galgut, the Ombudsman for long-term insurance, has recently released his 2009 report. Click here to read a summary of this report on the getclosure website.