Emergencies happen every time. One can never be too prepared for the day they might occur. We can only try to put measures in place to cater for these emergencies, just in case they ever occur when we least expect them. Credit life insurance is a form of life insurance design to pay-off a borrower’s outstanding debts if the borrower dies or defaults. Here’s a deeper look at all there is to know about Credit Life Insurance;
What is Credit Life Insurance?
It is an insurance that provides security should you cannot repay your debt because of retrenchment, disability or death. Banks, mortgage closing, and other financial institutions typically sell it.
The credit life insurance policy is meant to settle the debt either in part or in full to the bank or creditor. It protects both you and your loved ones from the strain of having to service debt when life happens.
How does credit life insurance works
Credit life insurance protection is a solution that helps ensure that the insurer covers your credit repayments when unforeseen circumstances happen. It comes into play when you impair your ability to earn an income or repay your loan amount. For example, if you cannot earn an income because of disability, critical illness and retrenchment or death.
There are different types credit life insurance that may apply to your credit agreement so is it advisable to check your policy terms, and the protection provided by your particular policy, to help you make the right decision about how to manage your repayments in these difficult times.
It is important to note that, with credit life insurance, the lender is the sole beneficiary and not your loved ones. If you die, the insurer will pay out the proceeds to the lender to settle your debt.
Benefits of Credit life Insurance
Credit life insurance can be a great tool for taking full responsibility for your actions and reducing the debt burden that might rest on your loved ones. Some major benefits of Credit Life assurance include the fact that they;
Pays off your debt when the unexpected happens.
Usually, they appoint an executor to your estate when you die. This may involve selling off your assets to repay any outstanding debts.
Since we dedicate a credit life insurance policy to paying off a major debt. It can simplify the process and potentially leave more assets to pass on to your loved ones from your estate.
Protects cosigners, joint account holders or spouses in community states
Without a life insurance policy in place, your family or loan cosigners might pay off any shared debts if you die.
If you’ve taken out a loan with someone else or share a bank account, a credit life insurance policy could protect them financially in the event of your death.
No medical exam required
Credit life insurance isn’t medically underwritten. This means you don’t need to fill out a health questionnaire or take a medical exam. Because of that, it can be easier to qualify for coverage.
Especially if you have a health condition or a family history of health conditions working against you. And unlike traditional life insurance policies, your health won’t influence your premium.
It provides peace of mind
Credit life insurance can be a great option if, for whatever reason, you cannot get a regular life insurance policy. Credit life insurance rarely requires a medical exam. So, if you’ve been denied life insurance, and you’re worried about how your debts would be repaid in the event of your untimely death, disability, or unemployment, you may have good reason to consider a credit life insurance policy.
Companies in South Africa that provide Credit Life insurance.
Below is a comprehensive list of top-notch financial service providers that offer Credit Life insurance as part of their product.
Old Mutual Funds
Old mutual fund has been in operation for a very long time, with up to 300 branches nationwide. In these years, they have consistently provided standard financial services offering loan services for clients in South Africa. Click here for more information about their credit life insurance.
Standard Bank
Standard bank is a deeply rooted financial service provider. They’ve been serving and supporting their clients, employees, and communities for over 156 years now. With a presence in 20 African countries and key global markets, their differentiator is their long-term efficiency and commitment to Africa. Click here for more information about their credit life insurance.
Sanlam Loans
Sanlam is a complex financial service group that has been creating value for its stakeholders since 1918. With their headquarters in South Africa, they are in full operation across several selected global markets. Sanlam is classified as a domestic systemically important financial institution in South Africa. Click here for more information about their credit life insurance.
Ned Bank
Nedbank is a top financial institution in South Africa. Operating with so much dedication to providing quality services to its members. They have taken out time to integrate credit cards into their financial product to serve the increasing numbers of customers. Click here for more information about their credit life insurance.
Conclusion
Credit life insurance is a financial policy that pays off one debt if you die. It is something you typically consider when you’re taking out a loan for large purchases like a car, home or personal loan. Be sure to check out the terms and conditions of the financial provider before signing up with them.