There is no single price. What you pay depends on the type of credit, the amount insured, the benefits included and the insurer. For credit life that your credit provider requires, the regulations set a monthly ceiling per R1 000: R4.50 for most credit and R2 for most home loans.
The legal ceilings
For credit life that a credit provider requires you to keep, Regulation 3 of the Credit Life Insurance Regulations sets the most that can be charged each month for each person insured. The ceiling includes any commission, fees and expenses.
| Type of credit | Maximum per month | Calculated on |
|---|---|---|
| Home loans, other than affordable housing | R2 per R1 000 | The deferred amount |
| Affordable housing home loans (a defined category of smaller home loans) | R2 per R1 000 if you are under 55, R2.50 if you are over 55 | The deferred amount |
| Credit facilities, such as credit cards and store accounts | R4.50 per R1 000 | Your average use of the credit limit in the billing cycle |
| All other credit, including personal loans and vehicle finance | R4.50 per R1 000 | The deferred amount |
Extra benefits can raise the ceiling
If a policy goes beyond the minimum and settles your total obligations when you are temporarily disabled or unable to earn an income, the ceiling may rise by up to R1 per R1 000. A credit provider cannot force you to take those extra benefits.
What affects your actual cost
- Type of credit. Home loans have a lower ceiling than other credit.
- Amount insured. The premium is a rate per R1 000, so a larger insured amount costs more. See how credit life insurance is calculated.
- Benefits included. If you were not employed when cover began, you cannot be charged for unemployment cover. If you were already a pensioner, you cannot be charged for occupational disability cover.
- Your age. The regulations set age bands only for affordable housing home loans, where the ceiling is higher once you are over 55.
- The provider and insurer. Each sets its own pricing within the ceiling.
How to find out what you are paying
- Look for the insurance premium on your credit agreement, quotation or statement.
- Ask your credit provider for the rate per R1 000, the amount it is charged on and the benefits included.
- Ask for the exclusions and waiting periods in writing. Your provider must explain the exclusions when you sign and again at regular intervals.
- Compare the total cost over the whole term, not only the monthly figure.
The cheapest policy is not always the best
A lower premium can come with a longer waiting period, more exclusions or a shorter benefit. If you are thinking of replacing required cover, the new policy must still provide at least the minimum benefits. See can I replace my bank’s credit life insurance?