Usually yes. Credit life that your provider requires must include permanent and temporary disability benefits. Permanent disability settles the outstanding balance. Temporary disability pays the repayments that fall due while you cannot work, for up to 12 months at the legal minimum. Waiting periods, assessment periods and exclusions apply.
What the benefits pay
| If you become | The minimum benefit under the regulations |
|---|---|
| Permanently disabled | Settlement of the outstanding balance of your obligations under the credit agreement |
| Temporarily disabled | The obligations that fall due for up to 12 months, the rest of the agreement, or until you are no longer disabled, whichever is shortest |
The regulations define disability broadly. It includes a physical or mental impairment, whole or partial, temporary or permanent, that affects your ability to earn an income or meet your obligations under the credit agreement. It includes occupational disability, which means being unable to continue in your own job, occupation, profession or trade. Your policy sets the test that applies to your claim.
Waiting and assessment periods
- A waiting period of up to 3 months can apply to disability benefits, but only where the credit agreement runs for more than 6 months.
- No waiting period can apply to a short-term credit transaction with a term of one month or less.
- Insurers usually assess whether a disability is permanent before paying. The period and the medical evidence needed are set out in your policy.
What is not covered
Regulation 4 lists the only circumstances in which required credit life may exclude or limit death and disability cover:
- Abuse of alcohol, drugs or narcotics.
- Wilful self-inflicted injury or suicide.
- Active participation in war, civil unrest or similar events.
- The use of nuclear, biological or chemical weapons, or radioactive contamination.
- Taking part in criminal activities.
- Hazardous activities such as mountain climbing, bungee jumping and speed racing.
- A pre-existing condition you knew about that affected you in the 12 months before the cover began.
If you disclose a specific pre-existing condition before the cover starts, it may only be excluded if you are clearly told about that exclusion.
Pensioners and the self-employed
If you were already a pensioner when the cover started, you cannot be charged for occupational disability cover. If you are self-employed or work in the informal sector, the policy may include cover for being unable to earn an income, other than through retrenchment or occupational disability.
Optional extras
Some policies add a larger temporary disability benefit that settles your total obligations instead of only your repayments. It can raise the premium by up to R1 per R1 000, and a credit provider cannot force you to take it. See how much does credit life insurance cost?
If you become disabled
- Report the claim as early as you can. Policies set deadlines.
- Ask your doctor for the medical evidence your insurer asks for.
- Ask whether repayments and premiums must continue while the claim is assessed.
- Tell the insurer when your condition changes.