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Here's what you need to claim credit life if you're struggling to pay your loans due to Covid-19 lockdown

Check your credit life cover before opting for debt relief

Any credit life insurance taken out with a credit deal after August 2017 should cover your repayments or part of them if you are retrenched or if your income drops for various reasons.

Picture: 123RF/DASHADIMA
Picture: 123RF/DASHADIMA

If your income has dropped as a result of the coronavirus lockdown, check the credit life insurance on your credit agreement before you opt for repayment relief offered by the main banks.

Any credit life insurance taken out with a credit agreement after August 2017 should cover your repayments or part of them not only if you are retrenched but also if your income drops because you are forced to take unpaid leave, go on short time or take a pay cut.

After being criticised for not highlighting this, three banks have now acknowledged that credit life insurance could be a debt relief option over the next few months.

The banks were quick to announce Covid-19 debt relief programmes that give you reduced or suspended repayments for three months, but no relief from interest during the period. This means once the three months are up, you are likely to face an increased repayment or a longer repayment term as the interest and missed repayments will be added to the loan.

If you qualify for credit life insurance, however, the insurance may cover your repayments in part or in full, depending on your circumstances. This is obviously a much better option as you do not extend your repayment period and the interest.

The crucial date is August 2017 as policies taken out from that date have had to comply with regulations stating that they should cover a drop in income.


Credit life insurance is used to settle your debts or honour your debt repayments in the event of death, disability, terminal illness, unemployment or other insurable risks that are likely to impair your ability to earn an income or meet the obligations under a credit agreement.

“If you are permanently employed and you become unemployed or are unable to earn an income due to contracting Covid-19 or due to measures put in place to prevent the spread of the virus, all your obligations under credit agreements can be paid either for 12 months during the remaining repayment period of the credit agreement, or until you are able to find employment or earn an income, whichever is the shorter period,” Lee Bromfield, CEO of FNB Life, says.

FNB will take applications for credit life insurance claims from you if you are:

  • Permanently employed, but not receiving an income because your employer is not receiving income;
  • Permanently employed but forced to take leave indefinitely;
  • Permanently employed but unable to travel overseas and meet/service clients for which you are paid;
  • A contracted employee such as a teacher who is unable to work due to classes not being held.

FNB says it may entertain a claim from certain people in the informal sector if they stated they were employed full time when they took out the credit and paid for the benefit. These people include:

  • Domestic workers, caregivers and au pairs whose income has stopped as their employers have a no work, no pay rule.
  • The self-employed who have had to close their businesses or whose clients have cancelled because they are:
    • A restaurant owner;
    • Photographer;
    • Bar owner;
    • Event planner; or
    • Tour guide.

FNB says it will not entertain claims from you if you are:

  • Permanently employed and still earn an income, but it has been reduced by a variable percentage as a result of Covid-19; or
  • Permanently employed and in quarantine but still being paid.

Basani Maluleke, CEO at African Bank, says you can claim on your credit life insurance taken out after August 2017 if you are on short time, compulsory unpaid leave or you have been retrenched.

Dushen Naidoo, managing executive of insurance at Absa, says Absa encourages you to first exhaust your credit life insurance before opting for payment relief but the choice is up to you. In addition to regular credit life cover, Absa also has benefits on some products that offer cover for expenses, he says.

Walter Marte, managing executive at Nedbank Insurance, says the only Nedbank credit agreement with mandatory credit life cover is the personal loan product.

He says the bank will extend benefits for those with insurance that was taken out before August 2017.

On other credit agreements, credit life cover is optional and if you did not take it out, you will not have cover.

The banks provided Money with a list of documents they will require for claims and Marte noted that getting some of these to the bank could be a challenge during the lockdown.

“We are working closely with our unsecured lending division and recommend that clients implement a payment holiday, so they have enough time to collect the necessary documentation to process the insurance claim,” he says.

A Standard Bank spokesperson told Money that the bank’s management was busy consulting with stakeholders and not in a position to comment at the time of publishing.

The documents you will need from each bank are as follows:


Maluleke says you will typically need the following documents in addition to a certified copy of your ID:

Short time:

  • Letter from employer stating that you are on short time.
  • Payslips before short time and all payslips during short time (if no payslips are given to you by your employer, a bank statement from after the loss occurred will be accepted — covering full salary and short time salary paid.)

Compulsory unpaid leave:

  • A letter from your employer stating that you are retrenched and confirmation that you are not receiving any remuneration.
  • Bank statements after the loss occurred


  • A letter from your employer (on a company letterhead) stating the termination reason or a completed U19 from the department of employment & labour or a company liquidation letter showing last days worked or a certificate of service with a termination reason.

All documents must have the date of the event.


Bromfield says FNB will be contacting clients with credit life insurance directly to help process those credit life claims or you can apply via the Covid-19 tab on the FNB App.

He says the documents you will need are:

Employed but not receiving an income or on unpaid leave:

  • A termination letter from your employer;
  • A letter confirming your loss of income;
  • Your bank statements; and
  • Your IRP 5.

Employed but unable to travel overseas:

  • A letter from your employer confirming loss of income;
  • Your bank statements;
  • Your IRP 5; and
  • A copy of your employment contract showing the travel requirements.

A contracted employee unable to work:

  • A letter from your employer or proof of employment or your payslip.

Self-employed with credit life benefits:

  • Your bank statements; and
  • Your tax return.

Working in the informal sector, for example domestic, au pair or carer with credit life benefits:

  • A letter from your employer; and
  • Your bank statements.


Naidoo says there are some standard terms on all contracts, for example, it must have been in place for three months. He says for any claim you will need:

  • Bank statements for three months; and
  • Proof of loss of income such as a letter from your employer

Contact: Absa Life on 0860 227 253.


Marte says for any claim you will need:

  • Salary slips for three months (one for the month of claim and two months before the claim);
  • Bank statements for three months (one for the month of claim and two months before the claim);
  • A letter from your employer explaining reasons for unpaid leave and expected duration of such leave.

Contact: Nedbank Insurance — 0860 333 111


Contact: Standard Bank Insurance Brokers at  SBIBServices@standardbank.co.za