By: Nkazi Sokhulu, co-founder and Chief Executive Officer at Yalu
Credit Life Insurance is an important consideration for South Africans worried about the threat of retrenchment…
The spread of COVID-19 has challenged the global economy, and its impact is likely to be long lasting. As countries across the world go into lock down consumer demand is falling, while production across all sectors is struggling to keep up output levels in the face of self-isolation.
‘This is worrying for the South African economy, which was already contracting,’ says Nkazi Sokhulu, co-founder and Chief Executive Officer at Yalu, a Credit Life Insurance brand, Yalu. ‘Our country experienced significant retrenchments in 2019. With COVID-19 negatively impacting the global economy we could well experience more lay-offs.’
Within this context, Credit Life Insurance is a crucial risk management tool every South African should get to grips with. Ironically, it’s also one of the least understood insurance lines in South Africa with one of the lowest claims rate, even though Credit Life Insurance policies are often (but not always) a mandatory requirement when taking out loans and other credit facilities.
’Credit Life Insurance covers borrowers’ debt in the case of retrenchment, disability or death,’ Sokhulu explains. ‘A lot of South African families spend years paying off debt in these situations, unaware that they have insurance in place to cover what they’ve borrowed. It’s crucial as our economy contracts and COVID-19 spreads that we change this.’
Two of the most important impacts of the current COVID-19 pandemic are deaths caused directly by the virus, and retrenchments created by a rapidly contracting global economy. In both instances, Credit Life Insurance offers vital protection for South African families.
’Every family should be aware what Credit Life Insurance policies they have in place,’ says Sokhulu. ’You can’t claim if you don’t understand what policies you have. But there’s also another crucial factor to consider in tough economic times: How much are you paying for these policies every month?’
The premiums charged for Credit Life Insurance policies can vary dramatically, and as a result a lot of consumers find themselves unwittingly paying the maximum possible premium every month – creating room for savings if they were to choose a different provider.
’When conditions are as tough as they currently are, every Rand counts,’ adds Sokhulu. ’South Africans should be aware not only that they may have protection they weren’t aware of, but also that they could be saving money every month by optimising their Credit Life Insurance policies.’
Fortunately, assessing and optimising your family’s Credit Life Insurance policy structure is a lot easier than it sounds. A quick visit to the Yalu website can offer consumers an overview of their various policies and tells them how much money they could save every month by switching providers. The whole process takes no more than five minutes.
’Once you have this information you can start to make active decisions about how much you’re paying every month,’ concludes Sokhulu. ’You can also ensure that all family members know which policies are in place, and what they must do if the worst happens, to allow them to claim.’