Sep 23, 2008
Groundbreaking: funeral insurance that pays consumers back if no claim is made – available from their local supermarket
Metropolitan Cover2go, a division of Metropolitan, has created a product that practically addresses the ongoing challenge of universal access and financial empowerment in the form of the Cashback Funeral Policy from Metropolitan Cover2go. The policy pays customers all their premiums back if there is no claim on the life of the policy owner within the five-year term of the policy. It’s the easiest funeral cover yet, available exclusively at Shoprite supermarkets nationwide. This move extends insurance to a vastly wider market providing financial security products to a customer base that traditionally may not have had access to insurance. The product also adds a new dimension to the already extensive range of financial services products that Shoprite distributes at its in-store Money Market counters.
The Cashback Funeral Policy starter pack can be bought off the shelf at Shoprite till points, with no HIV or other medical tests, complicated paperwork, bank accounts or insurance brokers required. This adds to Metropolitan Cover2go’s innovative, affordable and accessible range of insurance products.
“Cover2go has partnered with Shoprite to give South Africans very affordable funeral cover that is backed by a trusted name, Metropolitan, but designed to respond to people’s day-to-day needs. The majority of South Africans want trustworthy, reputable funeral cover, but feel excluded by the more traditional insurance companies’ requirement for a bank account, or for them to go to an insurance broker,” explains Derek Pead, CEO of Metropolitan Cover2go. “We can provide insurance products at very low cost because we use technology and non-traditional delivery channels to reach the market.”
Shoprite, with its in-store Money Market counters, is the perfect match for Cover2go. Money Market counters form part of the Group’s non-core value-added strategy. The main focus of the services offered is adding value to consumers’ shopping experience by providing convenience and savings in time and money. Research shows that 52% of all store visitors make use of the services offered at the Money Market counters. These include the ability to make payments for utilities, buy airtime, book national bus and air tickets, and transfer money from one Shoprite store to another, anywhere in the country.
This low-cost money transfer service launched in April 2006 and found immediate acceptance with consumers as a completely secure, uncomplicated way of moving money in real time between any of the Group’s more than 450 Shoprite and Checkers stores in South Africa.
Customers pick up the Cashback Funeral Policy starter pack in the Shoprite store for R8.99. The exterior of the pack displays enough information for the customer to make an informed decision to buy the policy. They may then choose to take the pack home to read the information inside. Either immediately after purchase of the starter pack or at any time thereafter, the customer can go to any Shoprite Money Market counter with their ID, policy card and their first premium to activate the policy. All subsequent monthly premiums are paid in cash at any Shoprite or Checkers Money Market counter – there is no bank account or debit order required. If, after five years of regular monthly payments, there is no claim on the life of the policyowner, the policyowner gets all the premiums back – even if they have claimed on the life of their child. In line with industry standards, if someone misses a payment they have a month’s grace to catch up without jeopardising their right to the cashback benefit.
Premiums start at R49.99 per month for customers between the ages of 18 and 49, and R74.99 for those between the ages of 50 and 64 years. Cover levels are R10 000 for death by natural causes or accident death.
All the policy owner’s children under 21 will be covered automatically, whether they be biological, legally adopted or stepchildren. Metropolitan Cover2go has structured its cover in a way that specifically addresses the reality of single-parent families. So, a policy covers only the policy owner and their children – not their spouse. However, this means that if both spouses choose to cover themselves, their children benefit from double cover.
“The trend globally is for supermarket chains to extend their traditional offerings by adding financial services products. Today, insurance is a commodity that needs efficiency to make the business model succeed, not layer upon layer of complexity and red tape. Metropolitan Cover2go allows Shoprite’s customers access to a sound insurance product, and provides the retailer with the ability to bring more innovative products to market in the future,” said Brian Weyers, Marketing Director of the Shoprite Group.
The “cash-back” component is central to the offering – many consumers are reluctant to buy long-term insurance because, while they understand the need to guard against risk, there is an instinctive reaction against paying money for something they will not personally benefit from in their lifetime. “Some people can’t reconcile themselves with the feeling that with life insurance, money is being outlaid with no tangible foreseeable benefits,” says Pead. “This insight has been a major factor in the development of our products: the obstacle to the uptake of life insurance in poorer communities often leads to families facing unnecessary financial hardship if a breadwinner dies. Metropolitan Cover2go is offering the community a practical alternative that also fits in with Government’s drive to create a financially empowered citizenry”