You could have credit life cover on your loans without knowing it

Did you know: When you take out a loan, depending on the credit provider, credit life insurance, also known as credit insurance, may be a requirement. 

This is why, before signing up for any credit agreement, it’s very important that you read through everything. These credit agreements include, but are not limited to: credit cards, personal loans and vehicle asset finance. 

If credit life insurance on your particular loan is a prerequisite, it will be included in your monthly premium amount. 

Can a creditor insist that you have credit life insurance on your loan?

A credit provider can insist that you have credit life insurance on your loan. This is according to The National Credit Act. 

What is credit life cover?

Credit life cover is a type of insurance. It is intended to protect you, and the payment of your outstanding debts and outstanding loans, should you be:

• Retrenched or unable to earn an income
• In the case of a disability 
• Or death

This is important because, in the case of the above-mentioned scenarios, your debt doesn't just disappear or get written off. It still has to be paid and this is where credit life cover can be useful. 

Moku Tip: Credit life cover can usually be claimed within 12 months of the event taking place. This is different for each insurer and you should check what your policy entails.

Is it compulsory to have credit card insurance?

While it is not compulsory, some credit providers can insist on it being a prerequisite before granting you access to credit. 

Moku Tip: It’s important to note that should you default on your credit agreement and debt repayments, your credit life insurance can lapse.

The National Credit Regulator (NCR) has put regulations in place regarding the maximum amount creditors can charge consumers for credit life cover. 

• For unsecured loans (loans not backed by an asset), you can be charged a maximum of R4.50 per R1000. 
• For any home loans, credit life insurance cannot cost you more than R2 per R1000.

What events are covered by credit life insurance?

The events covered by credit life insurance is dependent on the insurer, but usually includes disability, retrenchment and death. 

What are the benefits of credit life cover?

Should you be retrenched or be involved in an accident that results in a temporary or permanent disability, your debts will still be taken care of. 

What is the difference between credit insurance and life insurance?

Life insurance is intended to cover the needs of your beneficiaries should you pass away. It can also be used to cover your debt. 

Credit life insurance, on the other hand, is intended to cover your debts when you, for some reason, are without an income and unable to pay your monthly debt obligations. 

Also important to note is that once you have settled your debt, your credit life insurance policy will no longer exist. Whereas a life insurance policy will. 

A few more noteworthy differences between the two:

Meerkat offers competitive credit life premiums for extensive cover. You can consolidate your premiums into one affordable credit life cover premium. 

Fill out the contact form and we’ll give you a FREE call-back. 

Moku Tip: Check to see how much of your debt is covered with the policy and what waiting periods are involved regarding retrenchment for example. 

How do I claim credit life cover?

If you have credit life cover with Meerkat, you can claim your cover by emailing insurance@meerkat.co.za or calling 021 003 4534.

Moku Tip: If you have been retrenched, check in with your creditors with whom you have loans. Ask them if you can see your policy documents. Alternatively, you can ask them upfront if you have credit life cover on your loan(s).

You can then tell them that you are retrenched and you are putting in a claim. They can then inform you about their claims process for credit life cover.