Premium reminders that don’t sound like debt collection

When a funeral premium fails, the policyholder is usually not trying to avoid paying. The money was not there on the day, or the bank details changed. The reminder they receive decides whether they pay within the grace period or feel threatened and stop answering. Here is how to get the tone right.

A missed premium is not a credit debt

The National Credit Act says that "a policy of insurance" is not a credit agreement (section 8(2)(a)). A missed funeral premium is therefore not an overdue loan repayment, and the language of credit collection, such as arrears, default, credit records and handover, does not belong in the message.

What the policyholder does have is a short grace period. Under Rule 15A of the Policyholder Protection Rules (PPRs), cover stays in force for 15 days after a missed monthly premium, and the insurer must tell the policyholder about the non-payment within that time. The reminder is a chance to keep a family covered, not a demand.

What the rules ask of every message

The PPRs set standards that apply to every message about a policy.

• Rule 1.3(a): in all communications the insurer must "act honourably, professionally and with due regard to the fair treatment of the policyholder".
• Rule 1.3(b): when the insurer starts the contact, it must "clearly explain the purpose" at the start.
• Rule 11.3.1: communication must be in plain language, must not be misleading, and any premium or amount must be stated "in actual monetary terms".
• Rule 1.4(c): policyholders must be "kept appropriately informed" during the life of the policy.

In practice, the first line should say who is writing, which policy it is about and why. The amount should be in rands, not "your outstanding balance".

Tone: what works

A good reminder is short and calm. It states facts and offers help.

Say that the premium for the named policy did not go through on a stated date. Give the exact amount. Explain that cover stays in place for now and say what the policyholder needs to do, by when, to keep it. Offer one easy way to pay, and a way to talk to someone if money is tight.

Leave out threats, capital letters, "final notice" headings, and anything that sounds like legal action. Never ask for a PIN or password. PASA reminds consumers that banks never send links asking for these and that such requests may be phishing (tricking people into handing over private details), so policyholders are right to be wary. Tell them how to confirm the message is genuine, for example by calling the number on their policy documents.

Respecting people's time, language and data

Keepbrook contacts policyholders Monday to Friday from 08:00 to 20:00 and Saturday from 09:00 to 13:00, never on Sundays or public holidays. Messages go in the policyholder's own language, and every message script is approved by the insurer before it is sent.

The Protection of Personal Information Act (POPIA) allows personal information to be processed where it is necessary to carry out a contract the person is party to (section 11(1)(b)). Keep reminders about the policy only. POPIA defines direct marketing as approaching someone to promote or offer goods or services, and section 69 limits electronic direct marketing to people who consented or existing customers who were given a chance to object. Adding a sales offer to a payment reminder can turn it into marketing.

Where a service provider sends messages for an insurer, POPIA calls it an "operator", and the insurer must have a written contract making sure it keeps the information secure (section 21). When National Treasury and the then Financial Services Board released the insurance conduct rules, they said insurers that outsource critical functions remain ultimately responsible for them. That is why the insurer approves every script.