Shield Your Debt: Standard Bank Unpacks the Power of Credit Life Insurance

• Importance of Credit Life Insurance: Muzi Khumalo, Credit Life Insurance Portfolio Manager with Standard Bank Insurance, emphasizes the importance of credit life insurance for individuals who are starting to apply for credit facilities. This type of insurance covers the outstanding balance of your debt in case of death, disability, or severe illness.
• Types and Benefits of Credit Life Insurance: There are different types of credit life insurance available depending on the credit facility chosen. The insurance can be customized to suit individual circumstances and financial positions, offering a range of benefits such as death, disability, dread disease, retrenchment, and/or temporary disability coverage.
• Shopping for Credit Life Insurance: While lenders may require borrowers to have credit life insurance, Khumalo advises customers to shop around and compare coverage. He also emphasizes the need to understand the specific benefits and exclusions of the cover to ensure comprehensive protection. He strongly recommends credit life insurance to protect loved ones from financial burden in case of unforeseen circumstances.

Standard Bank has highlighted the importance of credit life insurance for those entering the working world and beginning to apply for credit facilities. Muzi Khumalo, Credit Life Insurance Portfolio Manager with Standard Bank Insurance, explains that credit life insurance is designed to cover the outstanding balance of your debt should you pass away, become disabled, or be diagnosed with a dreaded disease.

Khumalo emphasizes that while life insurance can cover outstanding debt, it is advisable to have credit life insurance so that the life insurance death benefit does not have to go towards covering your outstanding debt. Instead, it can be used to maintain the standard of living for your beneficiaries and prevent them from facing financial difficulties.

Different types of credit life insurance are available depending on the borrowing product you select. It is possible to get credit life insurance on most credit facilities, including home loans, vehicle asset financing, credit cards, student loans, and personal loans. The pricing structure or premium customers pay for this cover will be determined by the loan balance. As you pay down the loan over time, the cost of the cover will be reduced.

The size or value of the payout will depend on the type of credit life insurance policy that you take out. Policies can be customised to suit your unique circumstances and financial position. Some policies exclusively offer a death benefit, while others offer a mix of benefits such as death, disability and dread disease, retrenchment, and/or temporary disability.

Khumalo notes that credit life insurance is one of the most widely available insurance products, with over 90% of the big financial services providers in the country offering the cover to their customers. It is one of the most appreciated and popular forms of cover among clients, serving as an essential lifeline for your loved ones in a challenging economic environment.

While a lender may insist that a borrower has credit life insurance in place before granting a credit facility, Khumalo advises customers to shop around and compare coverage for their credit facility. However, he also advises customers to understand exactly what type of benefits are offered by the cover and note any specific exclusions to ensure that they are not left without protection.

Khumalo advises anyone taking out a credit facility to seriously consider credit life insurance to ensure that your loved ones do not have to dip into hard-earned savings or take on further debt to cover your debt obligations. He concludes, “As you charter your career path, you will work hard to make your someday dreams like owning a vehicle or home a reality. These assets must be protected in some way or another and credit life insurance is a sure way to protecting these assets and avoiding a scenario where your loved ones are burdened financially to cover the cost of these assets should the unthinkable happen.”