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.


What is credit life cover and how does it work?  This form of insurance pays off debts (loans, vehicle finance, store credit, credit cards, etc.) in the case of death, disability, terminal illness, retrenchment, unemployment or other insurance risks that impair the creditor’s ability to earn an income or meet their debt obligations. As the sum of the debt decreases, so should the premiums, because the amount paid out in the event of an insured event will only settle the remaining debt to the credit provider.


What are your rights when taking credit life insurance? While premiums are often added to the loan amount, it is actually the consumer’s prerogative to choose their own credit life insurance. The credit provider is within their legal rights to demand credit life insurance is maintained – but they do not have the right to demand this cover is taken with their own insurers.


How can consumers exercise these rights? In an ideal world, consumers would be given a quotation that clearly indicates the amount to be paid and what is covered. With this information, consumers could compare credit life insurance offerings, costs and commissions. However, these quotations are often very difficult to decipher. As such, Switch2 compares the quotes on its customers’ behalf, offering the opportunity to switch cover, and saving 95% of these customers on average R499 per month while still having the same benefits plus additional benefits! Why pay more for less, when you can switch and pay less for more? 



The Difference Between Credit Life Insurance & Life Insurance

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.

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Three Simple Ways To Save Money In 2017

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.

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Top Tips; How Credit Life Assurance Affects You

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.”

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Credit Life Assurance; An Insurance Lifeline

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.

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Is Switching Credit Life Cover Legal?

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.

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Which Loans Usually Include Credit Life Insurance?

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).

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Three Tips For Managing Credit Life Insurance

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.

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Four Steps To Financial Discipline

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.

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How Will Junk Status Affect SA's Pockets

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.

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Saving For A Rainy Day; Will It Be A Drizzle Or A Flood?

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.

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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.

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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.

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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.

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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.

Read more



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.

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The purpose of credit life insurance is to assist consumers in paying their debts in the event of an insured event occurring. Whether due to death, disability, illness, maternity leave or retrenchment, the urgency of having claims paid timeously cannot be overstated. The key is to receive assistance before creditors are forced to take legal action, making what could already be a stressful time in the consumer’s life even more strenuous.

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