In Duplum Ruling On Life Policy Loan

Ombud Rules Against Momentum in In Duplum Case

A consumer who borrowed R5000 against his Momentum life policy way back in 1999 (back then it was a Southern Life Policy but they merged with Momentum Life) never made repayments on the loan. He made a wrong assumption that the loan repayment would be included in his monthly premium for insurance (it wasn’t).

In 2017 (18 years later) the consumer was busy enquiring about another insurance product and was horrified to learn that the loan was still active and had been attracting interest and fees for nearly 2 decades.

Momentum argued that the consumer now had to pay the loan and interest and fees which they said amounted to a scary R55 000. This is obviously much more than the x2 / double up limit set by In Duplum which would, at maximum, limit the amount to R10 000.

The matter went to the Ombud for Long-Term Insurance and Ombud Judge Ron McLaren ruled that the in Duplum limit does apply to these types of accounts and loans.

 

 

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