Your premium is a monthly rate per R1 000 of the insured amount. The regulations cap that rate, at R4.50 per R1 000 for most credit and R2 for most home loans, and the National Credit Regulator expects cover and cost to stay in line with what you still owe.
The basic formula
Monthly premium = (insured amount ÷ R1 000) × the rate per R1 000.
For example, at a rate of R3 per R1 000, an insured amount of R50 000 gives 50 × R3 = R150 a month. The rate and the insured amount are what change from one provider to the next.
What the insured amount is
Regulation 3(1) lets a provider charge on either of two bases:
- The deferred amount at the start of the agreement. The insured amount is fixed when you sign, so the premium may stay the same as you repay.
- The deferred amount from time to time. The insured amount follows your balance, so the premium falls as you repay.
The deferred amount is broadly the amount of credit you are borrowing, without the cost of the credit life insurance itself. For credit facilities such as credit cards, the premium is based on your average use of the credit limit in the billing cycle.
In March 2026 the National Credit Regulator issued a guideline on this. Whichever basis is used, cover must not materially exceed what you owe, and the premium must not charge you for materially more cover than the risk the insurer carries. The guideline applies going forward, so practice can still differ. Ask your provider which basis it uses.
The legal ceiling in numbers
| Example | Rate ceiling | Maximum per month |
|---|---|---|
| R800 000 home loan | R2 per R1 000 | 800 × R2 = R1 600 |
| R50 000 personal loan | R4.50 per R1 000 | 50 × R4.50 = R225 |
| Credit card with average use of R10 000 | R4.50 per R1 000 | 10 × R4.50 = R45 |
What changes the rate
- The type of credit. Home loans have a lower ceiling.
- The benefits. Extra benefits that settle your total obligations when you are temporarily disabled or unable to earn an income can add up to R1 per R1 000. You cannot be charged for unemployment cover if you were not employed when cover began.
- Your age. The regulations set age bands only for affordable housing home loans.
- How the insurer rates the risk. This can be based on your own profile or on a group of borrowers.
If the premium is charged annually
Where the cost is charged once a year, the ceiling is the monthly limit multiplied by 12. If it is charged for a period shorter than 12 months, the ceiling is the monthly limit multiplied by the number of months.
Questions to ask your provider
- What is the rate per R1 000?
- What amount is the premium calculated on?
- Will the premium fall as I repay?
- Which benefits are included, and what are the waiting periods and exclusions?