Kelly Leach is an Associate at our Claremont office, practicing in the Estates department. She graduated with an LLB from the University of the Western Cape in 2019. Kelly is a young up and coming professional who has set her sights on the commercial sector, she also has a passion for personal law, as well as the property industry. Kelly joined STBB in 2019 and has been exposed to the drafting of legal documents and agreements within the property sector as well as the drafting of Wills and Trusts and has a vast background in legal research. During Kelly’s years at University, she worked one-on-one with children within her community as a catechism teacher. She has also had the opportunity to assist in social changes in and around her community as a member of a non-profit organisation run by students who are dedicated to uplifting their surrounding communities called Shout. Kelly was also a member of Street Law, a student led organisation focusing on empowering vulnerable groups through legal education. She believes that her greatest accomplishment during her academic career, in partnership with other students and the UWC Alumni Relations Office, was securing the funding for over 93 students to complete their degrees and have food security for the duration of their studies in her final year. For 4 years, Kelly was within the top five on the Deans merit list, which afforded her the UWC Deans list bursary for each year. She was also granted the opportunity of joining the Golden Key International Society after her first year at University, this was accompanied with an invitation to join the Top Achievers Society at UWC. Kelly is very approachable and social professional.

Newsflash | Credit Life Insurance

While the debt relief holiday announced by South Africa’s major credit providers was a welcome relief to many, there are alternative measures that very few South Africans are aware of, although they are already providing for them.  Section 106 of the National Credit Act 35 of 2005 (the “Act”) states that a credit provider may require a consumer to maintain credit life insurance for the duration of the credit agreement.  The following note will explore how credit life insurance may be applied in order to reduce the financial impact on consumers as a result of the Disaster measures implemented to combat the spread of the Covid-19 virus.

What is credit life insurance?
Credit life insurance covers outstanding debt instalments in the event of a consumer’s death, disability, terminal illness, unemployment, or other insurable risk that is likely to impair the consumer’s ability to earn an income or meet his or her obligations under a credit agreement.

Maximum prescribed cost of credit life insurance.
Regulation 3(1) limits the cost of credit life insurance whereby consumers cannot be charged more than R4.50 per R1000 on unsecured loans, developmental credit agreements and other types of credit agreements.  Credit life insurance cannot exceed R2 per R1000 for any mortgage agreement.

Debt protection provided during Covid-19
In terms of regulation 3(2)(c), the credit life insurance cover must provide for at least the settlement of
in the event of the consumer becoming unemployed or unable to earn an income, other than as a result of permanent or temporary disability, all the consumer’s obligations under the credit agreement that become due and payable

  1. for a period of 12 months;
  2. during the remaining repayment period of the credit agreement; or
  3. until the consumer finds employment or is able to earn an income, whichever is the shouter period”.

This provision would apply to consumers who have been maintaining credit life insurance either monthly or annually and have been retrenched, compelled to take unpaid leave or lost their source of income due to the measures implemented to combat the Covid-19 pandemic (this applies to persons who are self-employed as well as persons employed in the formal and informal sector).  The insurance will cover their instalments for up to a year or until the consumer finds employment.  It is important to note that credit life insurance lapses if the account is in default.

In order for a consumer to ascertain whether they are covered by credit life insurance and are entitled to claim accordingly, they should examine their monthly statement which would indicate whether they have been paying an insurance premium.  In the case of store cards, it would appear as “balance protection”.  If a consumer is unsure of whether they are covered by credit life insurance or not, the consumer should contact their credit provider and ask for a copy of their credit agreement or whether they are covered by credit life insurance.

In the event that a consumer is covered by credit life insurance and has a valid claim due to loss of income as a result of the Covid-19 measures, the consumer may request the credit provider to activate their credit life insurance to cover the installments on their outstanding debt for the designated period.  The credit provider may request certain documentation in order to process the claim.

Switching credit insurance providers
Another way of mitigating financial distress is by replacing the current credit life policy.  This can be done in terms of regulation 7 and section 106(4)(a) of the Act, which provides a consumer with the right to substitute their credit life policy if another policy offers a more favorable rate for the same benefits and protection.  It must be noted that if a consumer wishes to substitute this or her current policy, the new policy must comply with the minimum cover and limited exclusions which are listed in the regulations.

The move to a new credit life policy may offer a consumer some financial relief while still maintaining a credit life policy.

Many people are unaware that they are protected by credit life insurance and as a result fail to ever utilize it when the need arises nor are they aware of their right to switch to a more favorable credit life policy. It is up to the consumer to contact their credit provider in order to activate the protection or inform them of any other wishes as explored above.

For assistance, contact us on or email us at

For the best legal advice and personalised service, let's talk