FNB extends Covid-19 relief benefits
Credit life insurance covers your debt in unforeseeable events such as retrenchment, disability or death
First National Bank (FNB) customers who opted for a cash-flow relief plan to pay a credit agreement in which FNB Life is the provider of credit life insurance will automatically benefit from free credit insurance on the cash-flow relief loan.
Credit life insurance — which covers your debt in the case of unforeseeable events such as retrenchment, disability or death — is not always mandatory. But when it is, you are at liberty to choose the provider of the insurance.
FNB says its decision to extend credit life benefits to customers is to protect them against the financial impact of Covid-19.
All banks have introduced measures to help customers struggling as a result of the pandemic.
While most banks are extending the term of your original credit agreement, FNB has opted instead to pay your instalments by way of a separate credit agreement (an emergency loan), which attracts interest at the prime rate. It is this loan that is being covered by free credit insurance, provided the original credit agreement was covered by FNB Life.
In addition, customers with FNB Life policies taken out before new regulations under the National Credit Act (NCA) were implemented and who were only covered for income losses stemming from retrenchment, will now be able to claim in instances when they have not been retrenched but are unable to earn an income for various reasons, the bank says.
“Customers who had invalid claims for this reason, during the Covid-19 period from 16 March, may be eligible to claim,” according to a media release issued by FNB. The bank says FNB Life will proactively assess previously declined claims from policies that predate the NCA credit life regulation and contact affected customers.
“The benefit extension will significantly increase the number of customers who can claim from their policy and ease the financial burden during these difficult times. In instances where our customers have not been retrenched but are unable to earn an income over this period, and who meet the criteria of the new benefit, will have these claims honoured,” says Lee Bromfield, CEO of FNB Life.
“We are doing this so that if a customer claims on their credit insurance for the underlying credit product, we should also cover the extension of the loan created through the emergency loan. We want to ensure that all customers are fully covered for all qualifying credit repayments when they have an FNB credit insurance policy.”
The impact of Covid-19 has been devastating to many households, so extending these benefits at no additional cost will alleviate some of the pressure on customers who already have cover, but suffered a full loss of income, the statement says.
Bromfield says the bank has increased its claims-processing capacity to handle extra volumes and improved the digital claims process, including the introduction of an online claims submission process and tracking function via FNB.mobi and the FNB app.
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