Life insurance license. Everything You Need To Know About Credit Life Insurance

Having at least a little debt has become the norm for most people, and while you may feel that you’re in control of your debt, it’s important to ensure that you’re covered in the event that something goes wrong and leaves you unable to make your payments. Cheapest life insurance rates.

This is where credit life insurance has you covered. Credit life insurance is an insurance product specifically designed to cover the cost of your debt if you aren’t able to pay it back due to disability, unemployment or death. If you don’t want to burden your loved ones with repayment commitments that you’re unable to meet, credit life insurance can give you peace of mind.

It covers you in the event of unemployment, disability or death

As we mentioned before, credit life insurance is there to ensure that should something happen that leaves you unable to earn an income (such as retrenchment, unemployment, illness, disability or death), your family won’t be burdened with paying your debt. Instead, the amount you still owe on that debt or your instalments payable will be covered by your credit life insurance.

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Perhaps because of the name (credit life insurance), many people think they’d only be covered in the event of death, but most policies will also provide cover in the event of disability and unemployment. It's important to know that if you’re a pensioner or self-employed, it’s against the law to sell you disability and unemployment cover.

You may already have credit life insurance

Considering that there are many people who don’t even know that credit life insurance exists, it’s no surprise that a lot of people don’t know that they might already have this cover and that the premiums are included in the cost of credit. That’s why it’s so important to read any credit agreements carefully(from store cards to credit cards and vehicle finance) before signing them. If after reading a credit agreement carefully you’re still unsure about how you are protected, ask. It’s important to note that while it covers you for the reasons already outlined, credit life insurance lapses if the account is in default.

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Most credit life insurance policies are not actually underwritten. What this means is that your premiums aren’t calculated according to your individual risk, so if you have a pre-existing health condition, you might not be covered if you die as a result of that condition.

The New Regulations limit the exclusions which may be included in a credit life policy.

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