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Life cover, disability cover and credit life

Life cover pays a lump sum if you die. Income protection pays a portion of income if you cannot work. Credit life settles a specific debt. They are not interchangeable.

Reviewed 29 October 2026 by the WiT Money editorial team. This is general information, not a recommendation from a named adviser.

Key points

  • A needs figure is debts plus income you want replaced, minus assets and cover you already have.
  • It is not an underwriting offer.
  • Credit life on a loan is optional in important cases. Ask.

The life-cover calculator adds the debts you type, a number of years of income, and once-off costs, then subtracts existing cover and liquid assets. The result is an illustration of a gap. It ignores inflation and tax. It is not a recommendation to buy a policy of that size.

Disability cover and income protection both respond to illness or injury, on different tests. One may pay a lump sum if you meet a definition of disability. The other may pay a monthly amount for a period if you cannot do your work. Critical illness pays on a listed diagnosis. Read the definitions. The marketing name is not the test.

Credit life

When a credit provider requires cover for a consumer agreement, the National Credit Act and its regulations limit the kind of cover and, in many cases, allow you to substitute your own policy. The premium is part of the cost of the credit. Ask for the instalment with and without it, and whether existing cover can be ceded.

Funeral cover is smaller

Funeral cover pays a benefit for a funeral, usually after a waiting period. It does not settle a bond or replace a salary. The funeral guide on this site stays with that product.

Questions readers ask

How much cover do I need?

Enough to do the job you named: clear debts, or replace income for a period, after the assets the family can already use. There is no universal multiple of salary.

Related

Sources

Page updated 29 October 2026. A source date is the day WiT Money checked that page, not a promise the institution has not changed it since.