Guiding consumers since 2009

Credit life insurance will soon be cheaper

By Jessica Anne Wood

A cap on the maximum amount that can be charged for credit life insurance will soon be implemented. The National Credit Regulator (NCR) explained: “The changes aim to cap the costs charged to consumers in relation to credit life insurance.”

This follows a number of instances which made the news where stores were charging customers exorbitant credit life insurance fees, along with a slew of other overcharging allegations. The likes of the Lewis Group and Finbond have been involved in cases where they were accused of charging excessive credit life insurance charges.

In November 2015, draft credit life insurance regulations were released for public comment. These draft regulations proposed the following caps to credit life insurance charges:


Maximum prescribed cost of credit life insurance (excluding the cost of credit)

Mortgage agreements

R2.00 per R1 000 of deferred amount

Credit facilities

R4.50 per R1 000 of deferred amount

Unsecured credit transaction

R4.50 per R1 000 of deferred amount

Short term credit transaction

R4.50 per R1 000 of deferred amount

Developmental credit agreements

R2.00 per R1 000 of deferred amount

Other credit agreements

R4.50 per R1 000 of deferred amount

Source: Draft credit life insurance regulations

These caps were implemented in May 2016, along with other caps to the maximum interest rate that could be charged on various loans. According to the NCR, these caps will curb excessive credit life insurance costs, as consumers will not be charged above the capped amount.

“There are some credit providers who are charging excessively, and we believe the regulation on credit life insurance is needed in order to stop these excessive charges,” stated the NCR.

It added that the published draft regulations capped the credit life insurance premium at R4.50 for all credit agreements except mortgage agreements. “The regulations will be published anytime from now,” noted the NCR.


 Handy tip: Knowing your credit score is important to manage your debt and know your financial standing. You can apply for a comprehensive credit report from Kudough through Justmoney.

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.


Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town