If you are being retrenched or forced to take unpaid leave due to the lockdown, you may be able to claim from your credit insurance policy.
Many people, especially those with short-term debt and even store cards, may have credit insurance without even being aware of it. This insurance covers your debt repayments if you are retrenched, experience a loss of income, are disabled, or die.
Some credit insurance policies provide for a “loss of income” provision if your employer has forced you to take unpaid leave or is unable to pay you due to the lockdown.
Unfortunately, a self-employed person may not have retrenchment protection unless they specified that they were employed and paid the appropriate premium. They would however have their debts fully paid in the event of death or disability.
Under the retrenchment provision, your debt repayments could be covered for up to 12 months or until you earn an income again ‒ whichever is shorter.
Credit providers will each have their own specific cover, so you need to speak to your credit provider for details.
In most cases, credit insurance is not required for home loans and car finance, however, some banks do include it automatically for people earning an income of R25 000 or less ‒ so it is worth checking.
It is also important to make your claim before you miss a payment as the premium is usually linked to your credit instalment.
It is good money management to understand your credit agreements, check your statements and understand your benefits.
Read this article for more details.