Photo by: Bloomberg
FNB says Credit Life is one of the options it offers to provide relief to customers impacted by Covid-19, serving as a credit insurance mechanism.
The financial services provider late in March announced a new set of cash flow relief measures for customers whose finances have been impacted by the coronavirus pandemic to enhance the set of measures customers would have historically relied on.
FNB agrees with personal finance commentators that credit insurance has always provided relief to customers who qualify, and should be one of the options that customers consider over the next few months.
With this in mind, FNB launched its Covid-19-related digital application process that assists customers to process credit insurance when applicable, before finalising additional cashflow relief measures with each customer.
FNB Life CEO Lee Bromfield explains that Credit Life has been around for a long time and the bank went live with cover on loss of income on its products in August 2017. Since then, it has always been one of the bank’s primary considerations for customers who are in financial difficulty.
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 a customer’s ability to earn an income or meet the obligations under a credit agreement.
FNB explains that if a customer is permanently employed and they become unemployed or are unable to earn an income due 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.
“It is important for customers to know what they are covered for to be able to make informed financial decisions, especially in light of Covid-19. We will be issuing direct communication to customers who have credit life insurance with the bank on their credit products.
“We are firmly committed to supporting our customers during this difficult time,” says Bromfield.
The insurance entails instalment cashflow relief, during which part or no instalments/repayments will be due for a specific period; a preferential interest rate will apply to the Covid-19 relief interventions given; no fees will be charged for any relief granted; assistance with processing credit insurance claims, where possible; and individualised bridge facilities for those who need it.
FNB encourages its customers whose income has been affected by the virus to apply for relief on its banking application through the Covid-19 icon.