Now is the time to read the fine print of your credit agreements.
“… if you have ever purchased anything on credit, chances are, you have also bought credit life insurance.” Credit life insurance is the insurance cover a consumer takes out in the event of their death, disability, terminal illness, unemployment, or other insurable risk that is likely to impair the consumer’s ability to earn an income or pay their monthly installments under a credit agreement.”
Exert taken from the Consumers in the dark about credit insurance news and publishing post by the CreditOmbud on 29 January 2016.
Although this post was made in 2016 its content, warning and guidelines have never been more appropriate than right now.
It is no surprise that a lot of people don’t know that they have credit life insurance and that the premiums are included in the cost of credit. That’s why it is so vital that you dust off those credit agreements and start reading the fine print.
Commonly, Credit Life Insurance covers your monthly debt payments / premiums or will settle the full outstanding amount on the account in the event of disability, unemployment, retrenchment, dreaded disease or death.
The cost of credit life insurance has been regulated by the NCR and applies to all credit agreements since August 2017. The amount added to your monthly credit agreement for credit life insurance may not exceed a maximum of R4.50 for every R1000 owed on all credit agreements that are NOT mortgages and a maximum of R2 for every R1000 owed on a mortgage agreement.
Here’s the catch though. Your credit life insurance usually becomes null and void if you default on your payment.
SO. Take some time (time is about all we have in abundance nowadays) and read through your credit agreements.
Contact me if you are unsure about the details or your credit agreements. We can work through it together.