Senzo Meyiwa insurance payout explained
Posted: 14 April 2016 Time: 11:49
The long-awaited life policy payout over Senzo Meyiwa, the late Orlando Pirates star, is said to have delivered R4-million, but leaves in its trail lots of questions, disappointed souls and critical personal finance management lessons.
Meyiwa, the goalkeeper who was also a Bafana Bafana captain, was shot dead at the house of his lover, the singer Kelly Khumalo, in Vosloorus on the 26th of October 2014.
It took just about 18 months for the life policy to pay out, which is a long time to wait for those who were hoping and praying to benefit from Meyiwa’s estate.
An insurance expert who declined to be named says the inconclusive Meyiwa murder investigation may have contributed to the delayed payout, but lack of organisation may also be a factor. And Meyiwa’s estate is only getting 50% (R2-million) of the total benefit. The other R2-million goes to Orlando Pirates.
Apparently there is no spouse and the Meyiwa family benefit is to be shared by three children and no other, not even the cantankerous Samuel Meyiwa.
Why is Orlando Pirates taking R2-million?
Dr Irvin Khoza’s outfit Orlando Pirates is well within its own rights to claim the R2-million. It was Orlando Pirates which took the life policy over the person of Senzo Meyiwa. This was expressly not just for the benefit of the player but for the footballing business.
The cold facts are that Meyiwa alongside other players was an income-generating asset for the business of Orlando Pirates. It is normal and actually prudent to insure your income-producing assets. In line with this principle Orlando Pirates takes policies on behalf of all its players.
What about Senzo Meyiwa’s wife Mandisa Mkhize?
Former South African Football Association executive Raymond Hack, administrator for the policy‚ was quoted saying the conditions of the policy prescribes it must benefit the spouse and children of the insured.
In Senzo Meyiwa's case there seems to be no-one who qualified as a wife. Hack said no-one came forward to claim the benefit due to the wife. This is strange given the fact that Meyiwa is known to have been traditionally wedded to Mandisa Mkhize and had a child with her.
The apparent exclusion of Mandisa Mkhize raises questions about the place of customary law within the country’s legal framework. But then there are particular intricacies, like the fact that Meyiwa seemed to have been separated from his wife, which may have influenced this case.
What about Meyiwa’s lover Kelly Khumalo?
Even though Khumalo is reported to have a child with Meyiwa and seemed to have become a live-in partner, she appears to have no legal standing to claim any benefit from the policy, other than standing in as guardian for Meyiwa’s child.
What about Meyiwa’s parents?
Senzo Meyiwa’s father, Samuel, seemed to have jumped the gun in positioning himself as the guardian of the soccer star’s estate. He will be one of the most disappointed people in the way the benefit of this insurance policy is to be administered.
A Will would have prevented the prevailing confusion
A proper will ensures that your estate is wrapped up according to your wish and in an orderly and respectable manner.
According to the Fiduciary Institute of South Africa (FISA) a very small percentage of South Africans are in the habit of preparing a proper will. This is a cause of widespread chaos, which can compromise even the beloved ones in the conclusion of financial affairs of deceased people.
Jacinta Bassuday, legal manager at Standard Trust Limited, has been quoted saying dying ‘intestate’ or without a will means that the state will decide where the assets of the deceased goes. In addition, the winding up of the estate takes much longer than if a will had been in place.
Bassuday says if you die intestate the following rules apply.
* If you are married without children your partner will inherit everything.
* If you had children and you left behind less than R250,000 your partner will also inherit everything.
* If you left behind more than R250,000 your children will inherit as well. The amount is based on a specific formula depending on the size of the estate.
* If you never got married or had children, your money and belongings will go to your parents.
* If your parents are no longer alive, your estate goes to your next closest relation.
* If no relations can be found, your money will go into a fund called the Guardians funds.
* If by that time no family member comes forward to claim it, it goes to the government.
* If you have not nominated guardians for your children they will become wards of the state and the state will decide who raises them.
Meyiwa was under-insured
Senzo Meyiwa is reported to have earned north of R100,000 per month. The idea of life insurance is to ensure that upon your death your dependents can sustain the lifestyle you maintained for them.
Surely the R2-million payout from the Orlando Pirates policy will not go far for Meyiwa’s three children. A personal top-up would have saved the situation.
By Ujuh reporter
* Ujuh is an alternative economic and business news platform geared towards maximisation of economic participation.