Your Debt Has Better Insurance

SAFETY NET: CREDIT LIFE COVER PROTECTS YOUR LENDER, AND MAYBE YOU, IF YOU KNOW IT EXISTS

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Here is an insurance policy you may have that you never knew you had. If you ever took out a loan, signed up for store credit, or financed a car or cell phone, chances are you already have a little-known but potentially life-saving insurance policy, without even realizing it.

Chris Coetzee, CEO at FinFix, says this policy is called credit life insurance and while it is meant to offer a financial safety net during life's toughest moments, most South Africans remain unaware of its existence until it is too late.

Credit life insurance is a type of insurance policy that covers your debt obligations in the event of death, disability, retrenchment, or critical illness.

"Credit life is built into millions of credit agreements and is quietly deducted month after month," says Coetzee.

"Yet we constantly see people facing retrenchment or disability who have no idea this cover exists. They miss payments, spiral into debt and only seek help when it is almost too late.

"If consumers understood and exercised their right to claim, it could mean the difference between staying afloat and financial ruin."