Guiding consumers since 2009

Credit Life Cover

Every time you take out credit, such as a personal loan or vehicle finance, your creditor will automatically include credit life cover to protect both parties in case you are unable to continue meeting your monthly instalments.

However, you have the right to replace this credit life cover with a more affordable option, on the condition that you remain covered to the same degree. It may seem like a small amount you need to pay each month, but it quickly adds up and you may be able to save a significant amount over time.

If you believe you can pay less for credit life cover, fill in the form below to get a competitive quote.

What does credit life cover protect you from?

The main purpose of credit life cover is to protect both you and your creditor if you are unable to meet your monthly instalments – predominantly, your untimely passing.

But beyond this, it will also kick in if you are retrenched, become disabled, or become critically ill. Note that the instances where it becomes effective will depend on each unique policy and you should read the terms and conditions carefully before selecting credit life cover from a provider.

Without credit life cover, your family may become responsible for debt they did not incur, or your credit provider may risk not receiving another instalment again.

How much does credit life cover cost?

In August 2017, the National Credit Regulator (NCR) decided to amend the National Credit Act so that credit life cover would be capped at a certain figure. In the past, credit life providers would charge as much as R50 for every R1,000 owed. On a debt of R5,000, this will add up to R250 each month – which is an incredible amount to cover regularly.

Today creditors are not allowed to charge more than R4.50 for every R1,000 owed. Based on the above example of R5,000 debt, you will pay R22.50 towards your credit life insurance each month. This is much less than the R250 credit life providers were able to charge in the past.

However, note that some credit providers will still charge more than others. For example, one might charge R2.50 for every R1,000, while another might charge R4.35 for every R1,000. In the case of the former, you’d pay R12.50 per month on R5,000 debt, while in the case of the latter, you’d pay R21,75 per month. That’s a difference of R9.25 each month, which adds up to R111 each year that you could be saving instead.

This may not seem like a significant amount, but what if your debt was larger? Assume you now owe R20,000 instead. By the end of 12 months, you could have saved a total of R444. This all adds up and over time you could be paying more for the exact same cover. Make sure you’re always paying as much as is necessary without being overcharged.

What if you don’t have credit life cover?

To put it bluntly, you probably do. Any respectable creditor will include credit life cover in your credit agreement. However, it’s possible that this may not be discussed with you in depth with the assumption that you have understood these terms and conditions from the contract.

To find out what you are covered for, get in touch with your credit provider or scrutinise your contract. Don’t feel bad if you’re uncertain whether you have credit life cover or not – the majority of consumers are unaware of what this is or that they’re already paying for it. Once you become aware of this payment, it’s your responsibility to ensure you’re getting the most bang for your buck.

If you find out that your creditor has not been charging you for credit life cover, you need to consider whether you’re working with a reputable creditor. They usually have agreements with credit life providers, which they add to their credit agreements. If this is not in place, consider it a warning sign that your creditor may not be a legitimate lender. Make sure you do your research and approach the NCA if you need any further assistance.

Credit life cover is incredibly important when you owe money to your creditors. Don’t make yourself or your family vulnerable to legal action from your creditors if you suddenly face a new hardship in life. Make sure you’re protected from the unforeseen.


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