Credit Life Insurance:  

Credit life insurance is a life insurance policy designed to pay off a borrower's debt if that borrower dies. This is often also referred to as credit protection plans.
So if you have debt on vehicle finance, home loans, personal loans, study loans, revolving loans, overdraft or credit card debt then you may consider taking out credit life insurance.
Most credit life insurance will alleviate your family’s financial burden if you are permanently or temporarily disabled, diagnosed with a dread disease, retrenched or in the event of your death.

There are a few insurers and niche players offering credit life insurance cover, so investigate your options carefully.


In fact the smartest thing you can do is - Get a specialist broker to do it for you!

Also note the following guidelines and considerations:

 

  • Often credit life insurance is linked to a term, age, monetary amount of the loan or debt outstanding or non-payment. Make sure you read your policy documentation to know your rights and obligations.
  • With credit life insurance the pay-out decreases in correlation to the repayment. Credit life insurance can be called a ‘decreasing sum assured product.
  • Note that certain products have waiting periods for cover to commence on certain insured perils.
  • A consumer is entitled to shop around for his or her own insurance and provided the policy has the same cover as the one proposed by the credit provider.
  • The credit provider cannot deny credit if the consumer takes out their own policy should he not be satisfied with the cover presented by the credit provider.
  • A consumer can also cede existing life cover to the credit provider as long as it meets requirements in terms of cover.
  • A consumer cannot elect to not include credit life insurance as part of the credit agreement if required

 

 

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