Credit insurance can be a relief during COVID-19 outbreak

In a video that was being widely and gratefully shared on Wednesday morning, personal finance guru Maya Fisher-French has tried to educate South Africans on the existence of credit insurance, which will cover them with the banks and possibly some other lenders in the event that they have lost their income during the lockdown period.

Many people are seeing their livelihoods threatened by the 21-day national shutdown, which has crippled the economy.

Fisher-French says in the clip: “So everyone’s talking about debt-relief holidays from the banks. But what I’m not hearing from the banks – and it is bizarre to me – is about your credit insurance. In fact, African Bank is the only bank so far that’s actually reminded people that they don’t need to take a debt holiday because they have credit insurance in place.

“Credit insurance is a policy that, if you have debt, you most likely have in conjunction with that. Since August 2017 all new loans issued since then have this extended credit life, which allowed you … and I’m going to read literally directly from a document I’ve received from FNB – because FNB didn’t know about it either until I highlighted it…”

• “If you’re permanently employed and your employer is unable to pay you an income, you have a valid claim.
• “If you’re permanently employed and your employer is forcing you to take unpaid leave, you have a claim.
• “Even if your job requires you to travel, for example, to have meetings, and you’re unable to earn an income from that, you have a claim.”

She said it was “extremely important before you rush off and ask for debt holidays … go first and ask about your credit insurance. Go to your bank and say, ‘This has happened to me, I’m genuinely not receiving an income.’ Because this is not for us who are maybe receiving an income but are just overindebted, this is for people whose income has stopped from their employer. ‘Please can I invoke my credit insurance.’

“Your credit insurance will pay your premiums for up to 12 months.

“So, guys, the best advice I can give you go and check your credit insurance policies right now.”

In a subsequent tweet, she further advised: “You need to check with your bank if you have credit insurance but I can tell you that Capitec Bank African Bank cover pays the premium, up to 12 months, for clients on short time or compulsory unpaid leave where the reduction in basic income is 20% or more.”