A South African court has ruled that Viantha Naidoo is not entitled to her late mother’s R6 million life insurance payout after it was discovered that her mother, Sandra Naidoo, misrepresented her income when applying for the policy.
Judge Mahendra Chetty of the Durban High Court dismissed the claim after insurer Discovery flagged the misrepresentation following Sandra’s death from natural causes in January 2016.
According to Discovery, Sandra falsely stated that she earned R35,000 as a front-end controller at Shoprite in Chatsworth, when her actual gross income was just R5,500, with a take-home salary of R3,600.
The insurer argued that had the correct income been disclosed, her coverage would have been capped at R1.2 million or potentially declined.
The case further revealed that Sandra had taken out another life insurance policy with Old Mutual on the same day, declaring an even higher income of R70,000. Old Mutual had already paid R3.3 million to Naidoo after her mother’s passing.
Judge Chetty ruled that Discovery had the right to void the contract due to Sandra’s misrepresentation, meaning no payout would be made to Naidoo. In addition, Naidoo forfeited the premiums her mother had paid as a penalty.
Naidoo attempted to justify the income discrepancy by claiming that her mother had additional earnings from Avon sales and dividends from a family business, but failed to provide evidence. An Avon representative testified that Sandra was not registered as one of their sales agents, further weakening Naidoo’s case.
Discovery presented payslips, bank statements, and testimony from Shoprite’s HR manager, confirming Sandra’s true income. The court also noted that the insurance application was assisted by an agent under investigation for inflating clients’ salaries to fraudulently secure higher coverage amounts.
Ultimately, the ruling upheld Discovery’s decision to deny the payout, reinforcing the consequences of misrepresentation in insurance claims.
