What is credit life cover?
Credit life cover is a type of insurance that aims to protect you and the payment of your outstanding debts and loans in the face of unforeseen circumstances. Whether you experience retrenchment, disability, or even death, credit life cover ensures that your financial obligations are still paid.
It is crucial to understand that in such situations, your debt does not simply vanish or get erased. Instead, it remains a burden that must be addressed. This is where credit life cover comes to your rescue, providing valuable assistance in meeting these obligations.
Remember, when it comes to claiming credit life cover, the timeframe may vary depending on the insurer. It's always wise to review your policy and verify the specific terms and conditions applicable to your situation.
So, how is it that I may not know if I have credit life insurance or not?
Did you know that credit life insurance, also known as credit insurance, may be a requirement when you take out a loan, depending on the credit provider? That's why it's crucial to carefully read through all the details before signing up for any credit agreement, whether it's for credit cards, personal loans, or vehicle asset finance.
And the reason you may not know about is that if credit life insurance is necessary for your specific loan, it will be included in your monthly premium amount. So, make sure you're fully informed and protected!
Therefore, if you have ever made a purchase on credit, it is highly likely that credit life insurance was included in the deal.
How can I check if I have credit life cover on my existing loans?
You can enquire about credit life cover on your pre-existing loans by contacting your different credit providers.
Is credit life cover compulsory?
While credit life cover is not compulsory, according to The National Credit Act, a creditor provider can insist that you are covered when you take out debt (enter into an agreement with them).
What does credit life insurance cover?
Credit life insurance covers a range of financial obligations in the event of unforeseen circumstances. It provides protection and peace of mind for both you and your loved ones. Here are some key aspects that credit life insurance typically covers:
1. Death Benefit: In the unfortunate event of your death, credit life insurance will cover the outstanding balance on your loans or debts, ensuring that your loved ones are not burdened with the financial responsibility.
2. Disability Benefit: If you become permanently disabled and are unable to work, credit life insurance can cover your loan repayments, giving you the financial support you need during this challenging time.
3. Retrenchment Benefit: In the event of retrenchment or involuntary job loss, credit life insurance can help cover your loan repayments for a specified period, providing you with a safety net until you find alternative employment.
It is important to review your specific policy to understand the exact terms and conditions of your credit life insurance coverage. Each insurer may have variations in their offerings, so it is crucial to familiarise yourself with the details to ensure you are adequately protected.
Moku Tip: It’s important to note that should you default on your credit agreement and debt repayments, your credit life insurance can lapse.
What does credit life cover cost?
The National Credit Regulator (NCR) has implemented regulations to govern the maximum fees that lenders can charge consumers for credit life cover.
For unsecured loans, which are loans not backed by any collateral, the maximum charge for credit life insurance is R4.50 per R1000 of the loan amount. This ensures that borrowers are not burdened with excessive costs.
In the case of home loans, the cost of credit life insurance cannot exceed R2 per R1000. This regulation aims to protect homeowners and ensure that they are not overcharged for this essential form of insurance.
These regulations provide transparency and fairness in the credit industry, allowing consumers to make informed decisions and access affordable credit life cover.
Save money and switch to Meerkat's credit life cover
Did you know: you are entitled to switch credit life insurance providers if you find that you can save money on your insurance premium with the new provider.
Let us have a look at your current credit life insurance cover and see if we can beat your premiums! Fill out the contact form today and we'll give you a FREE call-back.
Who is Meerkat?
Discover the Meerkat advantage - a leading financial wellness company dedicated to empowering South African consumers to unlock their financial potential. Specialising in debt counselling, providing affordable insurance solutions, and supporting you in creating an emergency fund for a secure tomorrow. Ready to experience the Meerkat difference? Simply complete the contact form on our website and enjoy a complimentary callback from our team of experts today.