What is credit life insurance?
Credit life insurance is an insurance product that covers you (and your
family) against the cost of outstanding debt in the case of death,
disability, or a big life event like retrenchment.
How does it work?
When you take out a credit agreement like a loan or credit card, there is
a monthly fee added to your monthly repayment. This fee is called "credit
life insurance".
Why is it important?
It's a valuable product that makes sure other people won't pay the price
of your outstanding debt should something happen to you.
Did you know you are probably already paying credit life insurance?
Most credit providers have a clause that requires you to pay for credit
life insurance if you have aform of credit with them.
The problem is most people aren't informed of the fee and don't know they
have a say in this amount and can actually replace it with a cheaper
solution! Sure, it's covered in the T & C's, but who reads those anyway?
The Credit Life Insurance amount is usually included in the monthly fees
you are paying for that credit. In recent years, a few companies have
started out with providing credit life insurance at a cheaper cost than
what you are paying in your current credit agreements. This is what
Fincheck does with our comparison tool above!
You can save tons of money when you choose a dedicated credit life
insurance through one of the offers above.
Imagine a world where your loan repayments are completed a full year
sooner than you thought possible. That's a financial year gained!
Or imagine being able to put more food on the table every month.
Saving money on your credit life insurance ultimately means you are
building a better financial future by making one better decision!
A very important thing to know: Credit life insurance on your loan is not
life insurance
If your loan or line of credit includes a fee for credit life insurance,
it is important to know you do not have life insurance. You only have
credit life insurance, which we have explained above.
You can never have credit life insurance at the cost of life insurance and
think your loved ones will be provided for in the case of death,
disability, or retrenchment.
Here are the top 5 considerations before signing on the dotted line for
credit life insurance
1. Does the insurance provider have your best interest at heart?
Choose a provider who actually helps you save money every month. You save
money when all the credit life insurance amounts on your outstanding loans
are replaced with one cheaper monthly amount.
2. Are you adequately covered?
Being underinsured creates a false sense of security and leaves the
insured or their family with a shortfall when the time to claim comes.
Make sure you are fully covered for all your outstanding loans and credit
agreements!
3. Is the provider reputable, and will they pay out on time?
Credit providers are often impatient when it comes to missed installments
and delayed payments.Choose an insurance provider that is a
well-recognised, registered financial services provider andmanages claims
in a timeous manner. Look for social proof and testimonials from other
users!
4. Are there any hidden catches?
This is one place where you might want to have a look at the small print
and make sure you know what your cover entails. Remember, you are
replacing your bank's cover with your own form of insurance, and if there
are any loopholes or anything that could prevent you from claiming in the
future, you'll be stuck with nasty consequences.
5. Are you paying competitive rates, or are you being overcharged on your
premium?
Credit life insurance was previously unregulated, leaving providers to
their own devices when determining the value of cover. Make sure you're
signing with a provider that offers reliable service and decreases your
premiums as the capital credit is paid off. When you compare and select
one of our partners through the Fincheck application, you can feel safe
knowing you will get value for your money.
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