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Credit Life Assurance protects the life of a person who has borrowed from a bank or any financial institution. Old Mutual will pay the remaining loan amount, freeing their family from the responsibility of repaying the outstanding loan.
Credit Life Assurance protects a lender against the risk of credit default in the event of death, disability or loss of a job of the borrower. The insurance pays the lender, not the consumer, in the event of a loss.
Scope Of Cover
- Protects the lender against the risk of credit default in the event of death.
- Permanent disability of the borrower
- Loss of a job of the borrower
- It will provide the bereaved family peace of mind that any remaining amount on the loan will be paid.
- It will save the deceased’s family from falling into debt as a result of the unexpected financial burden experienced by the death of the borrower.
- It cushions the bank or financial institution against financial risk, encouraging them to increase lending.
- Death benefit - An amount equal to but not exceeding the balance of the indebtedness.
- Total and permanent disability - A physical or mental condition that renders the borrower unable to perform any part of his occupation and in which there is no chance of improvement. In the event of the total and permanent disablement of the life assured occurring prior to the attainment of age 60 and before the expiry of the term of the credit agreement, an amount equal to the death benefit shall be payable.
- Temporary total disability - A physical or mental condition that renders the borrower unable to perform any part of his occupation for a short period of time. Payment of monthly instalment (agreed upon under the credit agreement) after the deferment of 30 days, if the life assured is prevented (as a result of illness or bodily injury) from earning his normal income from any occupation for which he is suited, taking education, training and experience into consideration.
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