A reader is notified by his bank has cancelled card balance assurance because he is over 65 years of age, despite the fact that he was not told of any age restriction.
M. Ducker
Letter by e-mail
I have received a letter from First National Bank (FNB) regarding the cancellation of card balance assurance (OBA) for people who have reached the age of 65.
When I took this insurance there was no mention of an age restriction. I have been paying premiums of R5.90 plus VAT since the inception of this assurance and will now be penalised because of my age. This seems to me like discrimination against the aged. Your comments would be appreciated.
Sipokazi Maposa replies:
Outstanding balance assurance is short term insurance that covers the outstanding balance on your credit card in case you die, lose your job or become disabled.
William Ramwell, a media liaison officer at FNB, says FNB has for many years been the only bank that provided OBA for people up to the age of 75, to a limit of R50 000. Other banks only cover clients up to the age of 65 at a value of R30 000.
He says FNB was recently placed in a difficult situation when its insurers increased premiums by what FNB considered too much.
As a result, FNB will switch to another insurer which will maintain the premium cost at R5.90 and keep the cover at up to R50 000. Unfortunately, the cover will be limited to those under the age of 65.
Ramwell says FNB accepted this reluctantly but if they had insisted on the 75 year age limit it would have meant that all card customers would have had to be charged higher premiums. FNB is trying to negotiate a better deal for OBA customers that are over 65 years but the charges that have been quoted so far are very high and would not be acceptable to customers.
Ramwell apologises for any inconvenience caused by the cessation of OBA benefits. FNB is doing its best to deliver a suitable product and will be advising its clients as soon as the product is available.