Credit life insurance pays off the remaining loan balance if the borrower dies or becomes disabled, so the debt does not fall on your family; if the sum insured exceeds the outstanding balance, the difference is paid to the heirs. The policy term is set to match the loan term.
Banks often require this policy when granting a loan. However, you do not have to buy it from the insurer your bank points you to: you can obtain a policy elsewhere that meets the bank's cover requirements and submit it to the bank. We set up the cover to your bank's requirements and work to find you a well-priced option.
What is covered?
- Repayment of the remaining loan balance on death
- Repayment of the remaining loan balance on disability (subject to policy terms)
- Payment of any amount exceeding the debt to the heirs
- Policy term matched to the loan term
- Available for mortgages, vehicle loans and consumer loans
- Freedom to obtain a compliant policy elsewhere and submit it to your bank
Optional add-on covers
- Decreasing cover that follows the outstanding balance (insurer and plan dependent)
- Planning alongside home and DASK earthquake policies for mortgages
What you should know
In credit life insurance, the bank is named as beneficiary up to the outstanding loan amount. For a policy bought elsewhere to be accepted, the sum insured, term and beneficiary details must match the bank's requirements; we check this with you before the policy is issued.
Age limits and maximum term vary by insurer, and your age at the end of the loan term is also taken into account. A health declaration is required, and an accurate declaration is critical for any future claim to be paid smoothly.
If you repay the loan early, cancellation of the policy and any premium refund are handled according to the policy terms.
Frequently asked questions
No. You can buy a policy elsewhere that meets the bank's cover requirements and submit it. By comparing options, it is often possible to find a lower premium.
The bank is paid first, up to the outstanding loan balance. If the sum insured exceeds the debt, the remainder goes to the heirs.
Term life pays the sum you choose to your beneficiaries for a one-year period. Credit life is designed primarily to pay off the loan over the loan term. They meet different needs and can be held together.
The information on this page is for general guidance and does not replace policy wording. Scope of cover, limits, deductibles and exclusions are determined by the general and special conditions of the insurer you choose.