WHAT IS CREDIT LIFE INSURANCE?
Credit life insurance is the insurance that covers the outstanding debt on your accounts in the event of your death, disability or retrenchment.
Credit life insurance or “customer protection insurance” is defined in the National Credit Act as the cover payable in the event of a consumer’s death, disability, terminal illness, unemployment, or other insurable risk that is likely to prevent the consumer from earning an income or meeting the obligations under a credit agreement.
IS IT LEGAL TO SWITCH COVER?
Yes, absolutely. For more information, read our blog; "Is switching credit life cover legal?"
AM I GOING TO BE PAYING FOR THIS SERVICE?
You will pay an Insurance Premium so that you can enjoy the benefits of the cover.
WILL THIS BE A SEPARATE DEBIT ORDER?
Your previous credit life insurance would most likely have been included in your instalment payment to your credit provider, but by providing independent insurance through Switch2 for all your credit products, the payment/s you make to your credit provider/s will be reduced in lieu of the cancelled credit life insurance portion on your loan/s and there will be a separate debit order paid to Switch2 to replace this.
HOW WILL I SEE MY SAVINGS?
The instalment paid to your credit provider should reduce as your credit life insurance premium will no longer be included in the instalment.
IS THIS A NEW POLICY?
HOW DOES THE PROCESS WORK?
- Step 1: Take an agent’s call and get ready to save
Step 2: Give the trusted agent your ID number to trace your current cover, and confirm that they may access your details
Step 3: The agent will instantly be able to describe your saving potential!
Step 4: Decide if saving is what you want to do
Step 5: Accept, and save
Step 1: Click on “Start Saving Today – Here’s How” and enter your details and click “Get Started”
Step 2: Enter your ID number (which is kept 100% confidential) and click “Accept”
Step 3: Instantly see your saving potential! Click “Yes Investigate” to continue (this creates no obligation to switch just yet)
Step 4: Answer a few quick questions and click “Next Read Terms and Conditions”
Step 5: Read some important information, and click “I Accept – Switch Me!”
WHAT IS HAPPENING IN THE BACKGROUND WHILE I ENTER MY DETAILS AND FOLLOW THE STEPS?
- With your permission, we review your credit profile and use it to estimate how much we could be saving you on your credit life insurance monthly.
- If you are satisfied with the savings, you will give us authority to start to Switch your credit life insurance. This allows us to interact with your credit providers on your behalf.
- We contact each of the respective credit providers with whom you have an account. It is during this Investigation Stage that we compare your premiums and benefits.
- We then cancel the existing credit life insurance with your current credit provider and replace it with the more affordable insurance that Switch2 offers.
- The benefit is paid directly to the respective credit provider when an insured event occurs (death, disability or retrenchment).
- We handle all the paperwork, but we will be in communication with you from time to time, as and when we might require additional documentation.
- These communications will, as far as possible, be in electronic format (sms, email).
HOW DO YOU KNOW I HAVE CREDIT LIFE INSURANCE IN PLACE?
Your current lenders confirm with us whether you are paying for credit life insurance. In most instances, credit providers insist that you have credit life insurance in place for the duration of the credit agreement. For more information, read our blog; "Which loans usually include credit life insurance"
WHAT DOES YOUR COMPANY GET FOR HELPING ME?
We collect your premium every month for the duration of the credit agreement and in return offer you suitable cover and benefits.
IS THERE A WAITING PERIOD?
Waiting periods are carried over from your existing policy.
WHAT ARE THE BENEFITS?
You could pay a more affordable premium, thereby saving money
You will enjoy one point of contact in dealing with a claim if an insured event occurs. If approved, we’ll pay the credit providers covered under our policy. This means you won’t have to reach out to all of your credit providers in the event of retrenchment, for example.
You’ll have peace of mind knowing we are a reputable company that will pay out in the case of an insured event occurring (subject to the client fulfilling the terms of the policy).
ARE THERE ANY BENEFITS IN ADDITION TO CREDIT LIFE INSURANCE SUCH AS, FOR EXAMPLE, MATERNITY BENEFITS?
We offer cover for hospitalisation and maternity which is often not included in credit life insurance policies within the marketplace.
IF I HAVE NO PRE-EXISTING MEDICAL CONDITIONS WHEN JOINING SWITCH2, AND AFTER A MONTH I AM DIAGNOSED WITH A CONDITION, WOULD I STILL BE COVERED?
All waiting periods are carried over from your current policy, which means that if you had a waiting period of 12 months and at the time of switching to us you had two months left, then that would be the waiting period with us (two months).
WHAT ARE SWITCH2’S CREDENTIALS?
Switch2 was established in 2016 and comprises a staff complement with over 75 years of financial services experience. Switch2 Credit Life is a Division of Clientèle Life Assurance Company Limited, an Authorised Financial Services Provider and registered insurer, FSP15268.
WHAT’S THE CATCH?
There really isn’t one.
DOES THIS AFFECT MY CREDIT SCORE OR AFFECT MY ACCOUNTS IN ANY NEGATIVE WAY?
No, it definitely won’t. Our call to the credit bureau will leave a footprint, which will confirm that this was merely to check your current records, and that no new loan application is being made.
HOW DO YOU CALCULATE MY DEBIT ORDER?
Your premium is calculated based on the outstanding balance on your accounts, which is reviewed quarterly and adjusted accordingly.
WILL MY DEBIT ORDER DECREASE AS MY BALANCES REDUCE AND HOW WILL YOU KNOW WHEN TO STOP THE DEBIT ORDER?
Yes, they will, the premiums decrease as the loan amount decreases. We monitor the status of the loans on a quarterly basis, and these checks will confirm if the loan is settled, at which point we will cancel the debit order.
WILL I RECEIVE STATEMENTS ON A MONTHLY BASIS?
You will receive a monthly newsletter, which will indicate the amount of money you have saved to date by switching.
IS THERE A BREAKDOWN OF HOW MUCH I WILL BE PAYING FOR EACH ACCOUNT, SHOWING WHEN I PAY LESS?
Certainly. Any and all information pertaining to your premiums is available on request from the Switch2 team.
WHAT HAPPENS TO THE INSTALMENTS THAT WE ALREADY PAID ON CREDIT LIFE INSURANCE?
Credit life insurance by its nature is a risk product. This means that the client pays a premium every month to insure a risk; for example death, disability or retrenchment. The cover ensures that, should one of these risks become a reality, the insurer will pay the benefit amount to the credit provider under the policy. If no insured event occurs, nothing is paid out. The credit life premiums already paid are not refundable.
WHY DO I NEED CREDIT LIFE INSURANCE?
A credit provider may require a consumer to maintain credit life insurance during the time of the agreement so that the loan will be paid if the creditor passes away, becomes disabled, is retrenched, or becomes unable to pay the debt. It is designed to protect and provide a measure of security for both the insured and the credit provider.
DO I NEED TO TAKE OUT CREDIT LIFE INSURANCE WITH THE CREDIT PROVIDER GIVING ME CREDIT?
No. The NCA confirms that, while the credit provider may offer you this insurance, you have the right to obtain cover anywhere. If you’ve already taken cover with the credit provider and want to switch, the only requirements are that the new cover must offer the same or better benefits as the existing cover, and there can be no gap in cover (there can be no period of time where no credit life insurance is in place).
DO I QUALIFY FOR A CUSTOMER PROTECTION INSURANCE POLICY (CREDIT LIFE INSURANCE) WITH SWITCH2?
You qualify for a policy if you:
- Have a balance outstanding on a loan agreement with a credit provider;
- Are not about to be retrenched;
- Are not self-employed; and
- Are economically active and able to demonstrate an income.
ONCE I SWITCH, WHAT PROTECTION WILL THE POLICY OFFER?
The customer protection insurance policy protects you in the case of an “insured event” taking place during your period of insurance. This includes, as a minimum, the following benefits:
- In the event of your death or permanent disability, the policy will pay a lump sum directly to the credit provider, equal to the value of the outstanding debt in terms of a credit agreement.
- In the event of you suffering a loss of income through temporary disability, retrenchment or any other cause through no fault of your own, the policy will cover the full monthly instalment for a period of up to 12 months.
WHAT IS EXCLUDED FROM THE CUSTOMER PROTECTION INSURANCE POLICY?
- Retrenchment benefits are not paid if you lose your income within 90 days of the commencement of the insurance cover.
- Suicide is not covered if it occurs within a period of 24 months of the commencement of the insurance cover.
- Pre-existing conditions are not covered if these conditions result in a claim within 12 months from the commencement of the insurance cover.
HOW ARE CLAIMS PAID OUT?
Once a claim has been processed and approved, the benefit will be paid to the credit provider.