Credit life insurance is attached to most South African credit agreements and it is one of the most under-claimed products in the country. Many people who are retrenched, disabled or bereaved never claim, because they do not know the cover exists.
It covers the outstanding balance on the credit agreement — not a payment to you — on death, permanent disability and, in most policies, retrenchment or loss of income. This page sets out how to claim.
Eligibility Requirements at a Glance
What is generally required to claim.
- A credit agreement with credit life cover in force at the date of the event
- An insured event within the policy terms — death, permanent disability, temporary disability, or retrenchment or loss of income
- Notification to the insurer within the period the policy specifies
- The claim submitted by the account holder, or by the estate or a family member on death
- Documentary proof of the event — a death certificate, medical reports or a retrenchment letter
- Premiums up to date at the date of the event
- The account details and the credit agreement number
- Completed claim forms in the insurer’s current version
Income and Affordability Requirements
Check every credit agreement you hold. Credit life is commonly attached to personal loans, vehicle finance, store accounts, credit cards and home loans, and it is often included without the borrower registering it. Look at the statements: a monthly insurance premium is the sign. If a family member has died, check all of their agreements.
Claim before falling into arrears. Notify the insurer as soon as the event happens. A claim submitted early stops interest, default listings and legal costs accruing on the account, and a delayed claim usually cannot undo those.
Retrenchment cover is the most missed. Most credit life policies cover retrenchment or loss of income for a defined number of months, and most retrenched people never claim it. If you lose your job, check every credit agreement you hold and claim on all of them.
Regulations set minimum standards. Credit life insurance on credit agreements is subject to regulations under the National Credit Act, including prescribed maximum premiums and minimum cover for defined events. Confirm the current position with the National Credit Regulator.
You may substitute your own policy. The National Credit Act allows a consumer to provide an equivalent policy of their own instead of the credit provider’s, which can be substantially cheaper. Ask the provider what the policy must cover.
Cover is not always the same across policies. Waiting periods, exclusions for pre-existing conditions, definitions of disability and the number of months of retrenchment cover all vary. Read the policy schedule rather than assuming.
Credit and Financial Requirements
Get the policy document and read it before claiming. The credit provider must give it to you on request. It sets out what is covered, the waiting periods, the exclusions and the notification deadline — and it is the document a dispute is decided on.
Do not accept a verbal refusal. If a claim is declined, ask for the reason in writing with reference to the policy clause relied on. Insurers sometimes decline on a first reading and pay on a second, and a written reason is what makes a challenge possible.
Escalate a declined claim. The National Financial Ombud Scheme handles complaints about insurers at no cost to you, and complaints about credit agreements can go to the National Credit Regulator. Both are free and both work.
Keep paying what you can while the claim is assessed, if you are able, and tell the credit provider a claim has been lodged. That prevents enforcement steps while the assessment runs.
Estates take time. Where the account holder has died, the estate process runs alongside the claim. Report the death to the credit provider immediately rather than waiting for the estate to be wound up, because the account continues to accrue interest until the claim is settled.
Beware of anyone charging to lodge a claim. Claiming is free and you can do it yourself. A person charging a percentage of a credit life payout is taking money for a form you can submit.
Documents and Verification Required
The claim document set.
- The credit agreement and account number
- The policy document or schedule for the credit life cover
- Completed claim forms in the insurer’s current version
- Certified copy of the account holder’s ID
- A death certificate and, where required, the BI-1663 notification of death, for a death claim
- Medical reports and a doctor’s statement, for a disability claim
- A retrenchment or termination letter from the employer, for a retrenchment claim
- UIF documentation, where relevant to a loss-of-income claim
- Letters of executorship, where the estate is claiming
- Latest account statements
How to Apply and Improve Approval Readiness
Notify the credit provider and the insurer in writing as soon as the event happens, ask for the policy document and the claim forms, and submit everything with proof of delivery. Keep a copy of everything you send.
If you have been retrenched or a family member has died, work through every credit agreement in the household. The cover is paid for; not claiming it simply means the premiums bought nothing.
- Check every credit agreement for a monthly insurance premium
- Notify the insurer immediately — do not wait until arrears build up
- Claim on retrenchment cover; it is the most commonly missed
- Request the policy document and read the exclusions and deadlines
- Tell the credit provider a claim has been lodged
- Get any refusal in writing with the clause relied on
- Escalate a declined claim to the National Financial Ombud Scheme
- Report a death to the credit provider immediately, before the estate concludes
- Ask whether you may substitute a cheaper equivalent policy
- Never pay anyone a percentage to lodge a claim for you
Frequently Asked Questions
What does credit life insurance cover?
The outstanding balance on the credit agreement on death, permanent disability and, in most policies, temporary disability or retrenchment. It pays the account, not you.
What is the most missed claim?
Retrenchment. Most credit life policies cover loss of income for a defined number of months, and most retrenched people never claim on any of their agreements.
What if my claim is declined?
Ask for the reason in writing with the policy clause relied on, then escalate free of charge to the National Financial Ombud Scheme.
Do I have to use the provider’s policy?
No. The National Credit Act allows you to substitute an equivalent policy of your own, which is often cheaper. Ask what the policy must cover.
Policy terms, prescribed minimum cover, maximum premiums and claim procedures are set by the insurer and by regulations under the National Credit Act, and are revised. Confirm current requirements with the insurer, the credit provider and the National Credit Regulator.