When Johannesburg resident Susan Church decided to cancel her insurance policy from Discovery Life Ltd, she had no inkling of the events that were to befall her six weeks later. While on holiday at Sani Pass Lodge, she was overcome by carbon monoxide fumes from a faulty geyser in the showers. She collapsed and died. Church’s life was insured for at least R3m, but on her death, this amount was due to escalate. But a Pretoria News report by legal journalist Zelda Venter says the problem was that Church cancelled her life policy shortly before her death. When the parents wanted to claim the money, the insurer stood firm that Church had cancelled her insurance. Her parents, who were the beneficiaries of the policy, took Discovery to the Gauteng High Court (Johannesburg), where they demanded that R4m be paid out to them because of their daughter’s death.
The court ordered Discovery to pay up. But five judges of the SCA have now ruled that Discovery was within its rights not to pay. In their application, the parents argued that Discovery should have notified Church that her premium for the last month was not paid before they simply cancelled the policy. They also said that she should have been given a 30-day grace period to pay. Thus, they argued, Discovery was obliged to honour the claim and pay out the sum assured. But the SCA ruled in favour of Discovery and said Church made it clear that she did not want to continue with the policy. This was endorsed by the fact that she stopped her debit order and Discovery was not obliged to inform her of the non-payment, as it was per Church’s instructions to her bank.