The Lewis group announced recently (15 Aril) that they would be entering the funeral plan business, with plans underwritten by Sanlam subsidiary African Life.
Heinie Werth, Sanlam, CE of Sanlam Developing Markets, says that Lewis operates in the same market as Sanlam Sky, which focuses on the entry-level market. The Lewis group is progressive and has a strong brand in this market. It has also proven to be very successful in terms of collecting premiums.
Werth explains that Lewis staff don’t have to be FAIS compliant, as the process is structured as a non-advice sale, so Lewis staff members are not providing advice, merely information as contained in the product brochures.
The theory is that if a client requires advice, he or she can go to a Lewis sales staff member, who will contact the appointed call centre. The call centre agents are FAIS accredited and will assist with advice-related queries.
When comparing the Lewis product to its competitor the PEP funeral policy, which is provided and underwritten by Hollard. This product provides:
• R5 000 for R19,99 per month, and
• R10 000 cover for R34,99 per month.
The Lewis Stores Family Funeral Plan provides:
• R5 000 cover for R34 per month
• R10 000 cover for R55 per month
• R15 000 cover for R76 per month
Werth says that the difference is that their offering provides three additional benefits that the PEP Funeral policy doesn’t, namely:
• 10% cash back after 5 years
• A burial repatriation benefit
• A retrenchment benefit.
The news comes in the wake of the release by National Treasury of a discussion paper on funeral plans, and a week before the annoucement of the finding of an investigation in the credit life sector.