Unemployed, Can’t Pay Bond and Credit Instalments? “Credit Life Insurance” May Save You
Credit life insurance is not just death cover
That’s why you need to check right now whether or not any of your credit agreements are covered by “credit life insurance”. Many people don’t even realise they have this cover in place, and those that do may look at the “life” part of the name and think “well that’s no good to me or my family, I’m unemployed not dead”. The good news there is that most policies cover a host of other events leaving you unable to pay instalments – see below for more.
Do you have cover?
You may well have this cover in place without even realising it because it is commonly required when you take out any form of credit – think mortgage bonds, vehicle finance, credit cards, retail credit (store cards etc) and so on.
If you aren’t sure, check your latest bond or credit statement for any sign of an insurance premium deduction (it may be called “balance protection” or the like). Then contact the bank (or whichever credit grantor you are with) and ask them to check. You may not have it for example if at the time you ceded another life policy to the credit grantor.
What are you covered for?
Check what the terms of your particular policy are, but the minimum cover required by National Credit Act Regulations (which only affect credit agreements entered into on or after 9 August 2017) is -
- Death or permanent disability: The outstanding balance of your total obligations under the credit agreement is covered.
- Unemployment or inability to earn an income: You are covered until you find employment or are able to earn an income, with a maximum of 12 months’ instalments.
- On temporary disability: You are covered until you are no longer disabled, with a maximum of 12 months’ instalments.
Self-employed people and pensioners should check what cover they have under their particular policy, and what terms apply to them.