In this article we will unbundle some of the common terms used in the insurance industry by answering a few questions.
What is the difference between life cover and short term insurance cover?
Life insurance is aimed at protecting the insured person, their family, estate or creditors in the event of death or loss of income due to disability or illness, whereas short term insurance provides protection against the loss or damage to your property, such as your motor vehicle or home.
What is credit life cover?
Credit life cover is normally taken to provide protection to a creditor and your estate when you take a loan from a creditor. Credit life can provide cover against death, disability and retrenchment and may be a condition of granting the loan. In the event of a valid claim, the benefits are normally paid to the credit provider.
What does it mean to cede life cover?
This is when you transfer the rights to the proceeds of your policy, in the event of a claim, to a 3rd party, for instance to a credit provider, however you remain responsible for the payment of the policy premium.
How does an insurance policy lapse and can it be reinstated?
An insurance policy lapses when you do not pay the policy premiums as agreed in the policy terms and conditions. This means that the policy is no longer active, and you will no longer be covered by the policy.
Depending on the relevant policy terms and conditions, the insurer may reinstate a lapsed policy provided that the applicable conditions of cover have not changed. The insurer may request that you pay all the arrear premiums and complete a health declaration in order to consider the reinstatement.
How long is an insurance policy active?
Policies can be taken out for a certain term, for one's whole of life or for the term of the loan, depending on the product offering.
This article is intended to provide general information of an educational nature only and does not provide Financial Advice.
Should you have a complaint against your insurer, you should first contact your insurer to try and resolve the problem. If the problem is not resolved, you may submit a complaint to the Ombudsman, who will be able to provide you with free, efficient and fair dispute resolution.
FAIS Ombudsman
PO Box 74571, Lynnwood Ridge, 0040
012 762 5000
086 066 3247 (Sharecall)
info@faisombud.co.za
This post and content is sponsored, written and provided by SA Home Loans.
