Switch2 Credit Life


Q What is credit life insurance?
A

Credit life insurance is the most popular of long-term insurances, as it ensures that your debts will be paid off in the event of your death (and, depending on your plan, if you become disabled or are retrenched).

Credit life insurance or "customer protection insurance” is defined in the National Credit Act as the cover payable in the event of a consumer’s death, disability, terminal illness, unemployment, or other insurable risk that is likely to prevent the consumer from earning an income or meeting the obligations under a credit agreement.

Q Is it legal to switch cover?
A
Yes, absolutely. For more information.

Credit life insurance is a mandatory requirement in terms of the National Credit Act (NCA). While it is a requirement to have the cover in place, there is no prerequisite as to which provider the cover should be taken through and it’s a creditor’s right to choose who to insure through. As such, while creditors are required to have credit life insurance in place, they may switch cover without any repercussions.

Credit life insurance (also known as a Personal Protection Plan) is designed to cover the policy holder’s debts in the event of death, disability or retrenchment. Usually, at the onset of a loan agreement, the credit provider may insist that credit life insurance be taken, but it can also be established at the customer’s request and with the provider of their choice.

The NCA confirms that, while the credit provider may offer you this insurance, you have the right to obtain cover anywhere. The only requirements for a legal switch are that the new cover must offer the same or better benefits as the existing cover, and there can be no gap in cover (there can be no period of time where no credit life insurance is in place).

Q Am I going to be paying for this service?
A
No, the service is 100% free. You will continue to pay for credit life insurance, however, your monthly premium should be at a cheaper rate than what your credit provider charges, and the insurance premium payment will be made to Switch2 via debit order.
Q Will this be an additional debit order?
A
Your previous credit life insurance would most likely have been included in your instalment payment to your credit provider, but by providing independent insurance through Switch2 for all your credit products, there will be an additional debit order paid to Switch2.
Q How will I see my savings?
A
The instalment payment you pay to your credit provider should reduce by more than the cost of the credit life insurance premium which Switch2 provides.
Q Is this a new policy?
A
Yes.
Q How does the process work?
A

Telephonic process:

  • Step 1:Take an agent’s call and get ready to save
  • Step 2:Give the trusted agent your ID number to trace your current cover, and confirm that they may access your details
  • Step 3:The agent will instantly be able to describe your saving potential!
  • Step 4:Decide if saving is what you want to do
  • Step 5:Accept, and save

Online process:

  • Step 1:Click on "Save Money Today” and enter your ID number (which is kept 100% confidential)
  • Step 2:Enter your details, and Accept
  • Step 3:Instantly see your saving potential! Click "Save Now” to continue (this creates no obligation to switch just yet)
  • Step 4:Answer a few quick questions and submit
  • Step 5:Read some important information, and Accept

Q What is happening in the background while I enter my details and follow the steps?
A
  • With your permission, we review your credit profile and use it to estimate how much we could be saving you on your credit life insurance monthly.
  • If you are satisfied with the savings, you provide us with a Client Authority Mandate verbally over the phone. This allows us to interact with your credit providers on your behalf.
  • We contact each of the respective credit providers with whom you have an account, cancel the existing credit life insurance and switch the insurance cover.
  • The policy is ceded to the respective credit provider and is paid directly to them, in an insured event (death, disability or retrenchment).
  • We handle most of the paperwork, making it a seamless, painless switch.