Haven’t you asked yourself why some people have a normal lifestyle even during COVID19 Lockdown?
Some have had a serious financial crisis for more than a month, yet they still drive their cars or live a normal life? It is because of the benefit called PREMIUM/ PAYMENT HOLIDAY.
What is Premium/ Payment Holiday: it is a benefit that the customer gets, when she/he is experiencing a financial crisis, being retrenchment, unemployment or any financial hardship. Premium holiday allows the customer to stop the premiums for a certain period of time, depending on the contract with the institution.
There are advantages and disadvantages of using the benefit.
Advantages of Premium/ Payment Holiday
- You will still be covered under that contract; however, some may reduce the cover during the premium holiday benefits
- You can be on a premium holiday for the entire period allocated without any contribution.
- It will also help you not to be listed as a bad payer as you won’t be paying,
- You can save the money, especially when you just need relief from paying and save for something else.
Disadvantages of Premium/ Payment holiday
- The term of the contract might be extended, and the contract might take long.
- The premium might increase once you start being financially well, just to cover up the lost time you didn’t pay.
- If there is an interest included on a monthly payment, or the Credit life cover included, you pay it on a monthly basis without the initial monthly payment.
- At the end of the holiday, the interest will also be added to the new premium, regardless that you’ve been paying the interest during the holiday.
Most Financial Institutions have products with these benefits, it can also be done in a vehicle finance, Personal Loans, Credit Cards and House Bond
It is a consumer’s responsibility to make sure that they do understand the contract at an inception date. The Premium/ Payment Holiday is included in a contract at the beginning of the policy, one can also add it while the policy if it allows. For further information or clarity please consult your Financial advisor or send email to thubapelomosadi23@gmail with subject FINANCE.