Credit life insurance on a loan
Credit life insurance settles your loan if you die, become disabled or, on many policies, are retrenched. On longer agreements it is usually compulsory, and it is regularly the largest single line on a quote after interest — which makes it the item most worth examining and, sometimes, replacing.
What you need to know
A credit provider may require credit life cover, but it may not force you to buy its policy. You have the right to substitute a policy of your own with at least equivalent cover, and doing so can be materially cheaper — particularly if you already hold life cover with capacity.
Ask for the premium quoted separately from the instalment. Bundled into a single monthly figure it is invisible, and two quotes with identical rates can differ substantially once the insurance is separated out.
Check what triggers a claim. Retrenchment cover in particular varies: some policies pay instalments for a limited period, some require a qualifying period first, and some exclude fixed-term contracts entirely.
And claim when you should. Credit life cover is widely under-claimed in South Africa — households continue paying instalments on a loan that a policy attached to it would have settled, most commonly after a death in the family.
Related
Sources and last checked
- National Credit Act 34 of 2005 and its regulations — Government, as at 10 August 2026.
Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.