Photo by: Bloomberg
First National Bank (FNB) expects to pay out about R100-million worth of credit life insurance claims by June, for customers whose finances have been negatively impacted by Covid-19.
The insurance provider division of FNB, FNB Life, previously announced relief measures for customers including assistance with credit insurance where relevant.
FNB Life CE Lee Bromfield says the division is processing between 2 000 and 3 000 claims a day to rapidly increase the resolution of valid claims.
According to the National Credit Act, credit life insurance is payable in the event of death, disability, terminal illness, unemployment or other insurable risks that are likely to impair the consumer's ability to earn an income or meet the obligations under a credit agreement.
If a customer is permanently employed and they become unemployed or are unable to earn an income owing to contracting Covid-19, or owing to measures put in place to prevent the spread of the virus, all their obligations under the credit agreement that become due and payable can be paid either for 12 months during the remaining repayment period of the credit agreement, or until they are able to find employment or earn an income, whichever is the shorter period.
“We continue to issue direct communication to customers who have credit life insurance with us on their credit products and are firmly committed to supporting our customers during this difficult time.
“More importantly, we also urge customers to ensure they have credit insurance on their credit product as credit life is voluntary on some credit products,” concludes Bromfield.