In­surance and re­trench­ment

CityPress - - Business -

Lindiwe writes:

Our company has been put into business res­cue. If I take a vol­un­tary re­trench­ment pack­age, will I still qual­ify to have my loan and credit card paid? I have re­trench­ment cover with Absa and Stan­dard Bank. City Press replies:

Un­for­tu­nately, ac­cord­ing to Absa and Stan­dard Bank, re­trench­ment cover does not in­clude vol­un­tary re­trench­ment, which is a spe­cific ex­clu­sion in terms of the pol­icy.

The pur­pose of re­trench­ment cover is to pro­tect the con­sumer and the credit provider when the con­sumer loses a job and can­not pay a debt.

The cover usu­ally ser­vices the loan for a cer­tain pe­riod of time while you look for new em­ploy­ment – it does not pay off the loan in full.

In­sur­ers ex­clude cov­er­ing cer­tain sit­u­a­tions that are set out in the pol­icy doc­u­ments – th­ese ex­clu­sions usu­ally in­clude res­ig­na­tion, re­tire­ment, vol­un­tary re­trench­ment or mis­con­duct.

If you have many loans and may strug­gle to meet the monthly pay­ments, you must care­fully con­sider the of­fer of vol­un­tary re­trench­ment and whether the pack­age of­fered is enough to cover your monthly loan re­pay­ments.

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