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The Credit Ombud defines credit life assurance as; “The 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 instalments under a credit agreement.”
When it comes to financial management – whether personally or in business – an informed decision making process is essential. In terms of credit life assurance, and while this cover is crucial, a lack of industry regulation has resulted in over-charging and, in some cases, the exploitation of consumers.
The first pain point is price. When deciding on a policy, compare costs and determine – based on the average – what a fair price would be. The second pain point is the frivolous sale of policies to a target market that will never utilise the specific cover. For example, the sale of retrenchment packages to a self-employed individual, or a retired pensioner. The third pain point is knowledge and awareness of the cover, from the family’s point of view. Be sure to include a mention of the cover in your will, or share the information with your family, to prevent them from paying the debt on your behalf when they could claim from the policy to do so.
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In the heavily regulated and legislated insurance industry, jargon can become confusing. It is essential that consumers remain aware of which cover covers which debt or event; particularly to avoid a nasty surprise when it comes to claiming.
Saving money shouldn’t be a burden – and it isn’t all that difficult to do. When we’re tied up in our own finances it can become difficult to identify saving opportunities, but with a bit of perspective saving really can become simple.
The Credit Ombud defines credit life assurance as; “The 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 instalments under a credit agreement.”
As the saying goes, two things are certain in this life; death and taxes. Unfortunately, death is not the end of the line for your credit – leaving loved ones with the responsibility of settling what they can out of your estate.
Credit life insurance is a mandatory requirement in terms of the National Credit Act (NCA). While it is a requirement to have the cover in place, there is no prerequisite as to which provider the cover should be taken through and it’s a creditor’s right to choose who to insure through. As such, while creditors are required to have credit life insurance in place, they may switch cover without any repercussions.
According to a study by Business Report, credit life insurance is by far the most common form of long-term insurance by number of policies sold globally (although it can be a short-term insurance product too).
Credit life insurance can be a grudge purchase, but it is nevertheless required by law. While debtors are required to take this cover, there is no set requirement regarding with which provider the cover must be held. The keys to managing credit life insurance are; knowing your rights, reviewing your loan agreement, and cross-checking the cost of the cover.
If you’ve ever dreamed of a day when your home-loan is the only debt to pay, you’ll know that that dream will never materialise without financial discipline. Constantly revolving on loans or using the minimum payment paid into the credit card keeps consumers in debt, spending a fortune on interest and consistently living beyond their means.
South Africans collectively shook their heads in incredulous disbelief as the announcement was made that the country had been downgraded to junk status. While this will undoubtedly affect our pockets, the responsible approach is to implement contingency plans, learning to cope with the added pressures this downgrade entails.
The first step to financial planning is setting a budget. The second is sticking to it. In planning effectively for the future, a certain amount of savings should be built into the monthly budget. This money should be put aside – and if you have a propensity for transferring it back to use in the same month, put it in a limited-access account to ensure you make headway in protecting your future financial freedom.
At Switch2, we believe in following a TCF Policy; Treat Customers
Fairly. Part of this is helping customers to claim, even when they aren’t sure
they can. The first step to achieving this is to help customers understand the
claims process.
Whether you’ve got store
accounts or a credit card, vehicle loans or credit life cover, Switch2 strives
to save you money. But that’s not enough. To create real nett worth, the key is
to earn while you save.
Next month (August 2017), new credit life insurance regulations will
come into effect. These regulations have been established to offer you, the
consumer, greater protection. However, as is often the case when it comes to
credit life insurance, if you aren’t aware of your rights and the benefits they
entitle you to, you can’t claim these benefits.
Credit life insurance is often poorly understood; even by those that
are most likely to purchase it. Generally, the first experience credit
consumers have with insurance is credit life cover, yet many don’t fully grasp
what is included, how it works or what their rights are.
When purchasing a car, there are many difficult decisions to make. From
fixed and linked interest rates, to the ideal deposit amount, new or used,
balloon payments and the optimum contract period, buyers should ensure that
they’ve done their research and understand the implications before signing on
the dotted line.