South Africa observes Women’s Day in honour of the 20 000 brave women who marched to the Union Buildings in Pretoria on this day in 1956 to protest against pass laws under the Apartheid government.
They sang: “Wathint’ abafazi, wathint’ imbhokodo”, meaning “now you have touched the women, you have struck a rock”.
As a woman, wherever you are in the world, it is important to protect yourself and your assets.
Statistically, men often hold more wealth in terms of financial assets than women. Whether this is true in your relationship or not, it is vital to be informed about what debt you hold in your household.
As former UN Secretary-General Ban Ki-moon once said: “No woman should lose her status, livelihood or property when her husband dies.”
Perhaps the most powerful weapon in your arsenal to protect yourself, as a woman, is to know your rights. Make sure you know what’s in your contracts and other paperwork. Know the degree of debt your partner has under their name and where all the relevant documentation is kept. With all debt, ensure you know exactly what you are covered for if something happens to your husband or partner.
With whatever debt you take on in life, it is essential to ensure that you are covered if something goes wrong and you are unable to make payments – whether because of death, disability, retrenchment or maternity leave. Many credit agreements come with built in credit life insurance. Yet this is something that many people don’t know to look out for when signing financial agreements. Even those who carefully go through every line of their credit contracts don’t necessarily know what it is.
Be sure to check that you, and your partner, are protected on any type of credit agreements you hold: retail store cards, credit cards, personal loans and vehicle finance, for example.
Here’s what you need to know about credit life insurance:
What is credit life insurance?
Essentially, it is insurance that protects you if you are unable to make payments on your credit loans. This type of insurance could have a different name on every credit contract: debt protection, credit cover, asset cover or credit life insurance, to name a few.
It is important to ask about this cover before signing any documents and look for it on any contracts you and your partner already have. While most people agree to have this included in some form on their contracts, many do not fully grasp what is covered, how it works, or what their rights are.
What does it cover?
You’re probably assuming this is just to cover debt in the event of death. But according to Switch2, a division of Clientèle Life, this type of insurance often covers payment of debt in the event of “death, disability, terminal illness, retrenchment, unemployment or other insurance risks that impair the consumer’s ability to earn an income or meet their debt obligations”.
Divisional CEO of Switch2 Sasha Knott says “Everyone thinks this insurance is just in the case of death, but the vast majority – 80% – of our claims are because of retrenchment,” she says. “And in some cases, your debt can be paid off in full if you have good credit cover.”
What are your rights?
Another common misconception is that you must accept the contract that is in front of you. Credit life insurance could be a requirement when taking up most loans, but the credit provider cannot dictate that you purchase their option.
“Credit life insurance is a really good product, but many people are paying too much. It’s essentially the consumer’s prerogative to choose their own credit life insurance that offers the most suitable benefits to them, at a competitive cost,” Knott explains.
This article was first published in Insurance Gateway on 1 August 2018.