South Africa’s major banks have moved to provide loan repayment relief businesses and individuals who have been affected by the coronavirus and current 21-day lockdown.

Much of the relief on offer, as communicated by these financial services companies, will likely come in the form of a ‘payment holiday’.

“This means customers can hold off on paying home loans, car loans, other asset finance, short term loans, and credit cards for three months provided that they account are not in arrears as at 31 March 2020,” notes Standard Bank.

The three-month instalment relief will be available on 1 April 2020 until end June 2020.

However, financial experts have pointed out that for many, taking a ‘payment holiday’ during this difficult time may not be necessary, if you have credit life insurance cover.

Credit life insurance covers the outstanding debt on your accounts in the event of your death, disability or retrenchment. Most lenders insist that you have this insurance on your accounts.

Financial journalist Maya Fisher-French, said in a post on social media that that since August 2017 – all new loans have this extended credit life.

Citing a document she received from FNB, Fisher-French said: “If you are permanently employed and your employer is unable to pay you an income, you have a valid claim.

“If you’re permanently employed and your employer is forcing you to take unpaid leave, you have a claim.”

“Even if your job requires you to travel for example, to have meetings and you’re unable to earn an income from that, you have a claim.”

We’ve got you! We continue to work hard to find responsible ways to lessen the burden for many of our customers during this stressful time. Our Credit Life product will make a difference to the lives of many. https://t.co/ljMYM5bTAp Ts&Cs Apply #21daysLockdownSouthAfrica pic.twitter.com/Wp21EnQrr9 — African Bank (@AfricanBank) April 1, 2020

FNB stated in a press release 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.

“It is with this in mind that FNB further confirms that, as per the announcement made earlier this week, the new Covid-19-related digital application process assists customers to process credit insurance when applicable, before finalising additional cashflow relief measures with each customer,” it said.

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 due to contracting Covid-19 or due 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,” FNB said.

“It’s important for customers to know what they are covered for to be able to make informed financial decision, 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,” the bank said.

FNB provided the following guideline on when claims on this insurance would be valid.

Read: These are the people that will qualify for coronavirus financial relief, according to South African banks