THE FACTS 4
Emelina Sishange from Bethal, Mpumalanga said she took a loan with Direct Axis in 2013 that included insurance that will cover her should she lose her job. When she was retrenched in 2015 she contacted the insurance company to tell them that she is unemployed.
She was advised that they will pay the company for only six months thereafter she must look for a job and pay the remaining balance. This, she said, was not their agreement. The account has now been handed over to the attorneys. She has started making payments of R320 per month which she struggles to keep up with because she is still unemployed.
WHAT I DID
I contacted SCORPION LEGAL PROTECTION for professional legal advice.
SOLUTION
Emelina said she got a loan from Direct Axis and she took out an insurance cover on the loan in case she loses her job. An insurance is another type of a contract, therefore both the insurer and the reader are bound by the terms and conditions as stipulated in the insurance documents.
The insurer is also required to consider the insurance claim lodged by Emelina within the confines of the insurance contract. If there is a term in the contract which stipulates that the insurer will settle Emelina’s loan in full should she be retrenched, then the insurer is bound by such a term.
However, if there is a term in the insurance contract which states the insurer will pay the monthly instalment on behalf of Emelina for a period of six months only then the insured is bound by such a term.
Emelina must read the contract carefully and if it appears that the insurer had not processed the reader’s claim according to the contract then an appeal can be lodged with Direct Axis. Should Direct Axis fail to consider the appeal, or consider the appeal and still comes to the same determination then a complaint can be lodged with Ombudsman for Short Term Insurance.
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