Free Life Cover under scrutiny

In September, Trustco and Shoprite partnered to introduce a free life cover meant for ordinary Namibians to have access to a life cover.

Shoprite customers who buy for N$20 or more are eligible for this life cover and all that is required of them is to send their unique number (found on the receipt) through an SMS to Trustco. This SMS includes the clients ID number and a unique 22 digit code on the free life cover till slip. The client then nominates a beneficiary who will receive the benefit once the holder dies. This includes all purchases done at Shoprite, U-Save and Checkers outlets.Barely three months after the introduction of the life cover however, The Namibian is already receiving complaints regarding the life cover. Some of the SMS’s received from the readers are as follows:*ACC please investigate the free life cover at Shoprite the benefit claim pay out is a big concern since the information differs when one put in a claim at Trustco every one is just complaining. *TO Shoprite and Trustco Life: I’m grateful for introduction of the life cover to shoppers. My main worry is how are those ‘insured’ going to make a claim if their payments and contract are just on the cell phone? Please have written contracts.Donovan Pokolo from Namfisa said though that there is no such thing as a ‘free life cover’. He explains that insurance usually involves an insurer and an insured and a premium has to be paid for a claim to be paid out. ‘In the case of the ‘free’ life cover, Shoprite is the insured with Trustco being the insurer. That means that whatever premium is being paid is being paid by Shoprite’. He went on to say that Namfisa is always available to help consumers when it comes to any grievances they may have. ‘Once people have exhausted all avenues and have complained with their insurance company, they are then free to come to us with their grievances’, Pokolo said. ‘We have tested the model for this product and it is just another creative business idea which can fail or win’, Pokolo concluded.Contacted for comment, Janene van den Heever from Trustco referred The Namibian Consumer to the the booklet containing the terms and conditions of the Free Life Cover while at the same time explained the absence of any contract when signing up for this product. ‘These days with technology, contracts come into existence by different means. Posting letters and documents around is not the primary means of communication these days. Customers are advised electronically on the level of cover and the expiry date of the cover’ she said. Asked how Trustco benefits from this service, she said: ‘Trustco Life receives an insurance premium. Profit also pays salaries, taxes and bonuses, by the way! This is no different to standard business practice’.Some customers also claim that the life cover is sometimes reduced. *One can’t understand that the value of your cover is N$16 000 today but by tomorow your value is N$14 000. Why is it going down and not up?’ asked a reader.The voucher code that is issued at any Shoprite, U-Save or Checkers store, along with your purchases of N$20 or more, is valid for 30 days from date of issue. The life cover is valid from the date you made the purchase for a period of 30 days. A purchase on October 4 2012 would expire on the November 3 2012 irrespective of when the voucher was submitted via SMS. The Total Life cover after November 4 2012 will be reduced by the expired life cover.To keep the life cover, the customer is required to purchase goods from Shoprite every month.The client is required to send all their 22 digit voucher codes supplied with every single shopping experience of N$20 or more to 44048, as soon as possible after shopping. This must be done from the same phone number as the original registration.The system manages this process and will warn clients when their life cover will expire three days before hand. Total life cover is calculated from the amount of active vouchers you have at that point in time.Melkisedek Kandjii, the manager of Shoprite Namibia disputes claims by customers that the information on the booklet differs from that given upon claiming for benefits and went on to stress the extensive advertising done to inform people about the product and how it works. ‘We had people here (at Shoprite outlets) for an entire month to talk to people and educate them about the product’ . He also stated that even if you purchase from Shoprite and register someone else for the Free Life Cover, you will still receive a benefit upon that persons death. ‘The payment will be made as Trustco will not know who sent the SMS. At the end of the day, if it is your aunt you entered, you just have to make sure all the information is correct (ID number and mobile number) otherwise if things don’t add up Trustco will think it’s fraud and will not pay out anything’. Asked what exactly Shoprite benefits from this product, he mentions the free advertising and also points out that more customers coming to Shoprite due to the Free Life Cover will essentially lead to higher profits. ‘More and more customers are starting to change from other retailers’.

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