Credit life is one of the options to provide relief to customers impacted by COVID-19, says FNB

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As consumers continue to weigh the impact of COVID-19 on their finances, many will be considering options to protect themselves from financial difficulties.

Earlier this week, FNB announced its new set of cashflow relief measures for customers whose finances have been impacted by COVID-19 to enhance the set of measures customers would have historically relied on, like Credit Life where applicable.

The Bank acknowledges and agrees with personal finance commentators that credit insurance has always provided relief to customers who qualify and should be one of the options that customers consider over the next few months. It is with this in mind that FNB further confirms that, as per the announcement made earlier this week, the new COVID-19-related digital application process assists customers to process credit insurance when applicable, before finalising additional cashflow relief measures with each customer.

Lee Bromfield, CEO of FNB Life says, “Credit Life has been around for a long time and we went live with cover on loss of income on our products in August 2017. Since then, it has always been one of our primary considerations for customers who are in financial difficulty.”

According to the National Credit Act, credit life insurance is payable in the event of death, disability, terminal illness, unemployment or other insurable risks that are likely to impair the consumer’s ability to earn an income or meet the obligations under a credit agreement.

If a customer is permanently employed and they 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 their obligations under the Credit Agreement that become due and payable can be paid either for 12 months during the remaining repayment period of the Credit Agreement, or until they are able to find employment or earn an income whichever is the shorter period.

“It’s important for customers to know what they are covered for to be able to make informed financial decision, especially in light of COVID-19.  We will be issuing direct communication to customers who have credit life insurance with the bank on their credit products.  We are firmly committed to supporting our customers during this difficult time,” says Bromfield.

FNB encourages its customers whose income has been affected by COVID19 to apply for relief on its banking App via the COVID-19 icon.


On 30 March 2020, announced the following COVID-19 relief measures to be available for a period of three months, covering the following:

  • Instalment cashflow relief, during which part or no instalments/repayments will be due for a specific period;
  • A preferential interest rate will apply to the COVID19 relief interventions given;
  • No fees will be charged for any relief granted;
  • Assistance with processing credit insurance claims, where possible;
  • Individualised bridge facilities for those who need it.

Examples of Credit Life pay-out scenarios:

  Employment Status Loss of Income Scenario Claim Validity Evidence Requirement 
1. Permanently Employed I’m permanently employed, however as my employer is not receiving income, I no longer receive an income Valid Claim Letter from employer/

Financial Validation/

Bank Statements/

IRP5

 
2. Permanently Employed I’m permanently employed; however, my employer is forcing me take unpaid leave indefinitely. Valid Claim Letter from employer/

Financial Validation/

Bank Statements/

IRP5

 
3. Permanently Employed I’m employed and my work involves travel overseas and meeting/servicing clients for which I am paid, due to the travel ban imposed I’m unable to service/meet my clients and therefore unable to earn and income  Valid Claim if adequate evidence is provided to support claim Letter from employer/

Financial Validation/

Bank Statements/

IRP5/

Alternative employment

documentation

 
4. Informal Sector:

Domestic Worker

Au Pair

Care Giver

 

 I’m employed in the informal sector and my salary has stopped due to no work no pay Invalid claim, informal sector does not have cover   
 Valid Claim if customer declared themselves as permanently employed at sale stage and have been paying premiums for the benefit Letter from employer/

Financial Validation/

Bank Statements

 
5. Permanently Employed I still earn an income, but it has been reduced by a variable percentage as a result of COVID Invalid Claim due to income being earned   
6. Self-Employed I’m a Self-employed person and had to close my business / had clients that cancelled:

  • Restaurant owner
  • Photographer
  • Bar owners
  • Event planners
  • Tour Guides
 Invalid Claim – no cover for this benefit   
 Valid Claim if customer declared themselves as permanently employed at sale stage and have been paying premiums for the benefit Financial Validation/

Bank Statements

 
7. Contractor I’m a teacher on contract and unable to teach due to no class gatherings and do not earn any income.  Cannot teach via internet 

 

 Valid Claim if adequate evidence is provided to support claim Letter from employer or

Proof of employment or pay slip

 

 
8. Permanently Employed I’m permanently employed and currently in quarantine, however I’m receiving full salary

 

 Invalid Claim – no loss of income   

 

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