Frequently Asked Questions
What is credit life insurance?
Credit life insurance provides the security that should you as a policyholder be unable to repay your debt from a credit provider due to death, disability or retrenchment, the credit life policy will take care of your debt obligations. It's an invaluable cover that protects both you and your loved ones from the enormous strain of having to settle a debt when life circumstances may place you in a position where you simply are unable to.
Why do I need credit life insurance?
All credit providers are entitled to require you to maintain credit life insurance during the time of the credit agreement so that the credit obligations will be met should you pass away, become disabled, or retrenched and unable to pay the debt. It is designed to protect and provide a measure of security for both you and the credit provider.
What could make Yalu’s offering better than what I already have?
The Yalu Credit Life Insurance Plan is differentiated by the following:
- The premium automatically reduces every month as the debt amount reduces. You only pay for the cover you need to secure the outstanding balance and not a cent more.
- The plan refunds you 10% of premiums at the end of the credit agreement term if you have not claimed on the policy.
- Simplicity – it’s the first and only policy in the market that can be purchased effortlessly online in under five minutes, removes the admin hassle of switching from an existing credit life insurance provider by sending the cancellation letter required by your existing credit life policy on your behalf, and guarantees coverage for all other benefits not required by the credit life insurance regulations that your current credit life insurer covers.
- Affordable and transparent, with clearly defined benefits, premiums and speedy claims processes.
- One policy covers all credit agreement commitments - saving you on unnecessary admin fees and debit order costs for multiple policies.
Will the bank give me a loan in future if I switch credit life insurance providers?
Your choice of a credit life insurance provider does not affect your credit score and your ability to get future credit. The credit life regulations have standardised the benefit definitions and exclusions across all credit life insurance policies. This means that current credit providers cannot refuse to accept an alternative credit life policy of your choice which meet the standards of the credit life regulations, on the basis of the benefits and definitions being different to their own.
Will taking out this product negatively affect my credit record?
When I switch, how are my savings calculated?
This is done by comparing the credit life insurance price charged by your credit provider on a credit agreement issued since August 2017, compared to the Yalu Credit Life Insurance Plan’s price.
- Your savings calculation is based on industry-wide research of credit life pricing charged by the individual credit life insurance providers who are used by credit providers, completed in March 2018.
- Credit providers that were surveyed include 1Life, 1st for Women, Absa, Auto & General, African Bank, Bayport, Bruma, Budget Insurance, Capitec, Clientele, DirectAxis, FinChoice, FNB, GreenFin, Izwe, Makro, Nedbank, Old Mutual Finance, OOBA, RCS, Sanlam, SA Home Loans, Standard Bank, SWU, Ubank, Wesbank and Woolworths.
- Your savings may be higher if you were granted your credit agreement before August 2017. This is because regulations have now been put in place to limit the price insurers can charge for credit life insurance.
- Your savings calculation is based on you identifying yourself as being permanently employed.
- Your savings calculation assumes that the credit life product you currently have, is the insurance product your credit provider offered you when granting you your credit agreement.
What gives me assurance that my claims will be paid?
The Yalu Credit Life Insurance Plan is insured by Old Mutual Alternative Risk Transfer Limited(OMART), part of the Old Mutual Group.
Am I paying for credit life insurance already?
Most likely yes , if you have a personal loan and student loan. Most, if not all personal loan and student loan contracts in South Africa require it as a condition of getting the loan. For some banks, it is also compulsory for credit cards.
Why must Yalu know about my employment status?
The law and regulations require all credit life insurance providers to ask this question in order to determine the benefits that are relevant to you.
Will my policy premiums decrease as my balances reduce and how would you know when to stop the debit order?
Yes, the premiums decrease as the outstanding debt amount decreases. Your debit order stops when your debt repayment period comes to an end.
Will I at any point be paying 2 premiums for credit life insurance: one to the Yalu Credit Life Insurance Plan and the other to my credit provider?
Your credit provider usually has a 30-day notice period from when you inform them of your wish to cancel the credit life insurance they offered you when you took out your credit agreement, in which they are then duty-bound to stop charging you for credit life insurance. Your first Yalu Credit Life Insurance Plan premium will only be deducted in the month after you have taken up the plan. During this time, you will still enjoy cover.
How will my claims be paid out?
Your credit provider is the loss-payee on the Yalu Credit Life Insurance Plan. This means that, in the event of a claim, the sum insured will be paid to the credit provider directly to settle your credit agreement obligation.
But don’t I have to use the credit life insurance cover offered by my credit provider in order to qualify for the credit agreement?
No, being granted a credit agreement from a credit provider does not mean you have to settle for the credit life insurance product from the same credit provider as a pre-requisite for the credit agreement. You have the freedom of choice; Yalu gives you that choice to change.
I already have a credit life insurance policy, but would like to switch. Is this a difficult process?
Switching to a Yalu Credit Life Insurance Plan is made easy and convenient via our website, with the process completed in just five minutes. Yalu further simplifies the process by sending the cancellation letter required by your existing credit life policy on your behalf, so this big hassle factor is removed.
Don’t the new regulations that came into effect in August 2017 mean that the rate that I am paying on my existing credit life policy will not be higher than the capped amount of R4.50 per R1000 borrowed?
It is important for you to know that the new regulations and capping of rates only applies to credit agreements issued since August 2017; credit agreements issued before that date usually carry much higher credit life insurance rates. When reviewing your current credit life insurance policies, you may be horrified to find that you are paying as much as R15 or more per R1000. You do not have to be overpaying for your credit life insurance; you can now switch for a better rate, rewards and the same level of protection you have enjoyed all along.
What credit-type products can be insured?
The Yalu Credit Life Insurance Plan currently covers Personal Loans, Student Loans, Revolving Loans and Credit Cards. Soon this cover will be extended to other credit products such as Home Loans and Vehicle Loans.