This week we at Debt Centre want to share valuable information with our readers and other multi-social media platform members regarding Debt Protection Insurance. The new COVID19 Lockdown Law and regulations enforced the whole nation to stay at home for 21 days and then further extended and now in level four with some business that could open, affecting millions of consumer’s incomes as they cannot go to work. This pandemic has not only brought the workforce to a stand-still, but also hundreds of companies had to shut down in the light of the sudden high number of liquidation applications on record.
The biggest frustration consumers are dealing with now, is the uncertainty of a further extension of the lockdown, and how it will effect their household’s income and debt exposure. We find that the majority of people are stressed out and that they are unaware of debt protection / Credit Life insurance they might have on their accounts.
The way to understand how you would be able the claim for the credit debt protection the inability to work due to the COVID19 lockdown and laws that no persons are allowed to work with exceptions to essential workers. Therefore you must investigate whether you have this cover, it will help during this time to ensure accounts are paid when income is a challenge out your control.
What is Credit Life Insurance about?
In 2017, new regulations were introduced around credit life insurance, in terms of the NCA. It placed limited cost of credit life insurance on loans so consumers can be charged a maximum of R4.50 per R1000.00 on unsecured loans, store cards and other types of credit agreements.
When a consumer becomes permanently disabled or passed away, all outstanding debt for the products covered by credit life insurance will be settled. There are some credit life insurances that have loss of income cover provisions that will come into effect when your employer forced you to take unpaid leave.
We can all relate to this due to the Lockdown Laws and regulations implemented by the South African government to prevent the spread of the COVID19 decease. Consumers should not assume their payments will be automatically adjusted, they must speak to their banks to understand what cover they have under the credit life Insurance and what not.
What you should know is that you could benefit from the debt cover where your premiums are paid for up to 12 months. This information is vital for our readers in this difficult and trying time.
The following financial services count as short-term debt with added debt cover:
- Store cards
- Bayport loans
- African bank loans
- IEMAS loans
- Bank personal loans
- Bank credit cards … to mention a few.
Cover for Covid-19 infected consumers
After intensive research into the credit insurance clauses, we found out that the credit life insurance should cover you when you contract the Covid-19 virus, and are unable to work should the lockdown be uplifted. Two of the most important impacts of the Covid-19 are death and retrenchment, which credit life insurance offers vital protection from.
What credit agreements would not be covered by credit insurance?
A mortgage home loan bond account and vehicle finance most likely would not be covered. Due to the ignorance and lack of understanding the benefits, consumers do not consider the debt cover insurance when it was offered.
In South Africa, there has been a widespread abuse of consumers who have this cover from miss-selling to gross overcharging. In terms of the National Credit Act (NCA) credit life is mandatory and creditors can insist that you have it included in the credit agreement.
Self-employed persons might not have the credit life insurance or income protectors. Best to contact your business banker and other creditors to find out whether those policies are in place.
Claims against such insurance can be negatively affected when consumers skip payments as the credit life is linked to the credit agreement, so when a payment is skipped the policy can lapse.
What would you need to do?
Contact your bank and all other creditors, and request the following 7 valid points to ensure you understand whether you have debt protection insurance, and how it will help make payments on your accounts
- Request the assistance for debt protection and payment DEBT relief.
- Should you be in arrears how has it effected the policy.
- Which accounts are covered with the protection?
- What would you need to apply for the debt relief assistance?
- What would you need to claim for this assistance to cover instalments when self-employed?
- What is the period your accounts would be covered by your insurance?
- Can you have access to your credit facility once the policy has been granted to cover your monthly premiums?
If you were unsuccessful, request a copy of the insurance policy from the creditors and have a broker look into it for you whether you actually do have the benefit.
Payment holiday is your next option
Should you not have any debt insurance that would cover your premiums during dismissal or retrenchment, then request a payment holiday and see what your creditors are willing to do for you with your supporting documents.
When all fails you have ONE LAST option: www.debtcenter.co.za
Visit our new user friendly consumer calculator: https://www.debtcenter.co.za/financial-debt-calculator/
Contact us at Debt Center, we have a dedicated team of debt counselors that will assist your with an easy online assessment, we will forward your creditors the reasons for payment holiday and negotiate on your behalf.
We want to ensure that all consumers receive this journal / article which will empower them with what they need to do. We at Debt Centre understand that consumers are with their backs against the wall. Many have no idea what to do because of the overnight change in income affected by the Law imposed by Cyril Ramaphosa. We are all in the same boat and the COVID19 Virus is rocking and testing us like we have never experienced before.
Message from the Author Annienne Nel
Take this time and share special moments with your families, stay In Touch with your friends via Zoom and remember we are all experience the uncertainties of how long the lockdown will affect us. Pray for the less fortunate and be grateful for everything you have. As consumers we will get through this. Until next time, God bless.