Credit life insurance calculator
The legal maximum on your loan, card or bond
| Unsecured credit transaction: cap per R1,000 a month | R4.50 |
| R100,000 ÷ 1,000 × R4.50 | R450.00 |
| Annual charging (× 12) | R5,400.00 |
What next: credit life rules and your right to use your own policy · how to complain
Indicative: the cap is a legal maximum per life insured, commission and fees included — not a price. A lender may not force the optional extra benefits on you, and the National Credit Act lets you replace the lender's policy with one of your own choice.
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The caps per type of credit
Regulation 3 of the Credit Life Insurance Regulations, 2017 sets the maximum cost per month, per life insured, calculated on the deferred amount at the start of the agreement or on the deferred amount from time to time:
| Type of credit | Maximum per month |
|---|---|
| Mortgage agreements (other than affordable housing) | R2 per R1,000 of the deferred amount |
| Affordable housing mortgage (principal debt up to R450,000) | R2 per R1,000 under 55; R2.50 per R1,000 above 55 |
| Credit facilities (credit card, overdraft, store card) | R4.50 per R1,000 of the average utilisation of the credit limit in the billing cycle |
| Unsecured credit transactions | R4.50 per R1,000 of the deferred amount |
| Short-term credit transactions | R4.50 per R1,000 of the deferred amount |
| Developmental credit agreements | R4.50 per R1,000 of the deferred amount |
| Other credit agreements | R4.50 per R1,000 of the deferred amount |
The "deferred amount" excludes the cost of the credit life insurance itself. If the premium is charged yearly, the limit is the monthly cap × 12, or × the number of months covered if fewer (regulation 6).
Worked examples
- Personal loan, R100,000 owed: 100 × R4.50 = R450 a month at most.
- Same loan with the optional temporary-disability and no-income benefits: 100 × (R4.50 + R1) = R550 a month at most (regulation 5).
- Home loan, R1,000,000: 1,000 × R2 = R2,000 a month at most.
- Affordable housing loan, R400,000, borrower above 55: 400 × R2.50 = R1,000 a month at most.
If you pay more than the cap
Ask the lender in writing to explain the charge and correct it. A lender may require credit life, but section 106 of the National Credit Act lets you replace its policy with one of your own choice, and regulation 5 forbids forcing the optional extra benefits on you. The full rules — what the cover must include and what it may exclude — are in credit life insurance; how to escalate is in complaints.
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Frequently asked questions
What is the maximum credit life premium in South Africa?
R4.50 a month per R1,000 owed on most credit and R2 per R1,000 on a home loan (R2.50 above 55 on an affordable housing mortgage), commission and fees included — Credit Life Insurance Regulations, 2017, regulation 3.
How do I calculate credit life insurance?
Divide the amount you owe by 1,000 and multiply by the cap for your type of credit: R100,000 on a personal loan × R4.50 / 1,000 = R450 a month at most.
How is credit life on a credit card calculated?
On the average amount used of the credit limit in the billing cycle, at most R4.50 per R1,000 a month.
Can the bank force me to take its credit life policy?
It may require credit life cover, but section 106 of the National Credit Act gives you the right to use an existing policy or one from an insurer of your choice instead.