Consumer loan insurance: how to apply and from what risks such a policy will protect

Consumer credit is one of the most popular banking products. Today, it can be issued in just a few clicks in the bank's mobile application or on the website. When applying for a loan, customers often do not think about its insurance, and this is very reckless.

On the one hand, this turns into the fact that a person checks the box automatically (or does not uncheck it if it is set by default) and buys insurance without hesitation. 

On the other hand, a more attentive client forcibly unchecks this box and refuses credit insurance, which can lead to not the most pleasant consequences for him and his family members. 

Moreover, insurance is usually a requirement of the bank, and without it, the loan rate can be much higher.

We understand why and from what a consumer loan is insured and what such a policy gives Asian Wedding Photographer In Leicester.

Why are loans insured?

When a bank offers a client to take out insurance, he tries to reduce the risks of non-payment of the loan.

Why are loans insured

If a loan is issued for a large purchase - an apartment or a car - the law requires that the collateral be insured (the apartment and car remain pledged to the bank until the loan is repaid, and a loan is issued against this pledge).

In the case of a mortgage loan, you need to insure your home. If the apartment burns down or the house collapses, the insurance company will reimburse the bank for its cost. 

When buying a car on credit, you need to issue a hull insurance and extend it until the loan is repaid (you can extend it after the loan is repaid, but this will already be a voluntary decision of the car owner).

With consumer credit, the situation looks different. There is no collateral as such here, the borrower simply takes a certain amount of money from a credit institution. 

In this case, there is no compulsory insurance, although the terms of the loan may depend on its availability.

Voluntary credit insurance

Voluntary insurance of any loan in itself implies the possibility of refusing it. But even in the case of a mortgage loan, you should not rush to refuse. 

Voluntary credit insurance

The bank may offer to insure the life and health of the borrower, and with such a policy it is often possible to reduce the interest rate on a loan by 1-2%. The cost of 

The policy in this case almost always pays off with reduced payments, and in addition you have a guarantee that if something happens to you, the insurance company will pay off the mortgage loan.

Ordinary consumer credit insurance can also be waived. If you apply for it online, you just need to uncheck (or uncheck) the box where it is proposed to purchase an insurance policy. 

If you take out a loan for some large purchase in a store, you also have the right to refuse insurance (even if managers assure you that it is necessary to insure the loan) visit adimad productions.

What does consumer credit insurance cover?

By taking out consumer credit insurance, you protect yourself and your loved ones from unnecessary expenses in the event that something happens to you and you cannot pay your debt.

What does consumer credit insurance cove

This can be a serious injury with a long-term disability, disability of the first or second group, an accident, as well as loss of a job.

Of course, there are exceptions and a number of cases in which the insurance company will refuse to pay. For example, if the life and health of the borrower is insured, but at the same time he did not indicate his serious illnesses (so-called socially significant) 

When insuring, they will refuse to pay out when an insured event occurs. Also, payment will be denied if the insured event occurred due to alcohol or drug intoxication.

And with job loss insurance, you will not receive compensation from the insurance company if you quit of your own free will. Here, the insured event will only be the liquidation of the organization or the reduction of staff. All exceptions are written in the insurance contract, so you should never neglect reading it.

Is it possible to choose an insurance company for consumer credit insurance

When applying for a loan, the bank will offer you to insure it in a specific insurance company, while he will take a small commission for his agency services. It is not necessary to do this, you can choose the insurer yourself. It will take more time, but it will save you some money. 

It also often happens that the bank includes the cost of insurance in the loan amount, as a result, the loan amount and interest will increase. If you did not agree to this, you can write an application, and the bank will deduct the cost of insurance and recalculate payments. The policy will then have to be purchased separately.

Is it possible to refuse consumer credit insurance

As a standard by law, any insurance product has a cooling period (at least 14 days). During this period, you can return the insurance without penalty. However, it is important to re-read the loan agreement carefully. 

If, due to the presence of the policy, the bank has lowered the interest rate, then if it is abandoned, it will have the right to raise the rate. It is useful to calculate what is more profitable: to pay a policy or to make increased payments due to a higher interest rate. Insurance is almost always the cheapest option.

Post a Comment

Previous Post Next Post