Laid off? Some banks may pay you out retrenchment benefits.
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Some FNB customers who previously did not qualify for payment under the bank’s retrenchment policies because they were laid off can now try again.
FNB Life said it is extending its credit life insurance benefits to cover, among other things, people who took out retrenchment cover and were not able to claim even when they were not earning any income.
“Customers with policies taken out before the implementation of the NCA Credit Life Regulation, which are restricted to retrenchment cover, will now be able to claim where they have not been retrenched but are unable to earn an income for various reasons. Customers who had invalid claims for this reason, during the Covid-19 period from 16 March, may be eligible to claim and FNB Life will proactively assess and pay these claims,” said FNB Life in a statement.
The decision to extend retrenchment cover to people who have not been formally retrenched seems to be a growing phenomenon among bank-linked insurers, just as traditional insurers are turning their backs on retrenchment benefits.
- READ | As coronavirus threatens jobs, some insurers halt sales of retrenchment cover
Absa Life said in May it had also decided to review its retrenchment cover so that customers can be covered “under broader range of circumstances” that lead to loss of income, whereas this was previously confined to formal retrenchments. The banks also continue to write new retrenchment and loss of income policies while Liberty and Old Mutual confirmed just after the lockdown began in April that they are no longer taking new applications.
FNB also announced that its credit life insurance will now cover a portion of payment holidays and “Cashflow Relief Plan” that the bank extended to customers when the lockdown began.
FNB has aggressively been growing its life insurance business. Its CEO, Lee Bromfield, had his eyes set on displacing some of the big five traditional insurers after being named the fastest-growing insurer in SA’s individual risk market by Swiss RE in 2018.
Compiled by Londiwe Buthelezi
