Currently in South Africa there has been a lot of press coverage on the amount of unsecured debt (personal loans, micro-lending) being given and how sustainable this is for the end consumer. At DebtBusters, we have seen an increase in the levels of over-indebtedness, as well as the number of credit accounts held by the […]
27 November 2012
Credit Life insurance covers debt obligations in the event of the insured’s death, disability, a dread disease or retrenchment. Credit life insurance is usually sold as part of a loan or credit agreement.
In the case of death, total disability or dread disease the outstanding liability will be paid out. If the Insured is temporary disabled or retrenched, credit life insurance will cover the monthly debt review instalment for up to six months. Dual cover for a second assured person is available at a small increase in premium.
André Goethals, Credit Life Manager at InsuranceBusters, states that it is important to find out if you have credit life cover on your debt obligations. “The consumer is often charged a non-market related premium. Sometimes unscrupulous lenders are using credit life premiums to circumvent the limit on fees and interest placed on them by the National Credit Act. We have been able to negotiate a reduced rate with a reliable Insurer for our clients. The savings on the contribution can be utilised towards debt repayment. As a result their finances are normalised much sooner.”
He further adds: “Often consumers and their families are not even aware that they have credit life cover. In the event of a claimable event; death/disability, etc. debts are then redeemed from other sources, e.g. life cover or sale of assets. Our clients can however rest assured that due to our link with DebtBusters this will not happen. Our systems are programmed to red flag immediately on non-payment, and someone from the support staff will contact our client.
DebtBusters’ staff are all highly trained, and will be able to assist in managing this process in a professional and supportive manner.”
He goes on to say that there is a real need for credit life cover. “For most people all forms of insurance are a grudge purchase. In the event of a claim however the wisdom of their purchasing decision is proved.”
You can calculate the rate you are paying for your cover by dividing the debt amount by 1000 and then dividing the premium by this amount. For example if the loan amount is R10 000 and the premium is R70 then divide R10 000/1000 = 10 then divide the premium R70/10 = R7 per R1000 of cover.
Replacing an existing credit life policy with one offered by Insurance Busters is a simple process, and free of charge. Contact our agents on 0869 99 06 06 if you would like a no obligation quote, or would like more information.