How does credit insurance work?
No one is immune from an accident: temporary loss of their job, serious illness, disabling accident, ... all these reasons will prevent you from paying the monthly payments of your personal loan. This insurance is specifically dedicated to the coverage of your new credit whatever it is.
Outstanding balance life insurance guarantees your lender that the sums he has advanced will be reimbursed. But this also protects you because according to the conditions of your contract, if you are unable to honor your financial commitments for a few months or permanently, the insurance will pay your creditors. In the event of death, your whole family is safe because they will not have to reimburse the remaining amounts to the financial institution.
Three most asked questions about loan insurance
What is the use of loan insurance?
Sometimes, before granting you a loan, the bank will ask that you take out loan insurance. With this guarantee, the establishment is not exposed to the risk of non-payment. Indeed, if the borrower cannot properly repay the debt, the mutual will have to take over. Also, this provident contract will allow you to facilitate the release of a loan.
Is loan insurance compulsory?
Generally, loan insurance is not a requirement. However, in some cases, especially when the amount involved is high, the credit institution only grants funding to people who take out such a provident contract. For the establishment, this is a means of securing the amount awarded.
What are the guarantees in a borrower insurance contract?
Borrower insurance is required by many lending institutions before granting certain types of credit. It has various guarantees. This provident contract notably offers cover in the event of temporary or permanent incapacity. Sometimes also, if the subscriber dies, the mutual will take charge of the restitution of the debt.
The advantages of online credit insurance
It is not mandatory to take out outstanding balance life insurance, but it is strongly recommended! On the other hand, during a mortgage it is mandatory and can significantly increase the total cost of the loan. You should know that if you take out this insurance, the guarantee runs from the payment of the first insurance premium, there is no deadline to respect. And it will protect you during the entire credit. In addition, life insurance is tax deductible, so you will benefit from a tax reduction or deduction.
The general conditions of acceptance:
- Be in good health when signing the contract.
- Not to be incapacitated for work.
- Not suffer from any long-term illness.
Find out and compare, conditions can vary greatly from one company to another. It is necessary to compare the different loan offers, this indeed helps to negotiate a cheap credit thereafter.
Where to buy cheap loan insurance?
When signing a mortgage loan, the lender regularly requires you to take out the outstanding balance insurance with the same company or a privileged partner. You will then benefit from a reduction in the interest rate of the loan, which is not negligible. However, you can refuse and choose another company of your choice but you risk losing the benefits offered or seeing your loan rejected outright. Nothing prevents you from accepting initially and terminating your insurance contract after one or a few years if you have found another company offering better coverage or a more attractive price / quality ratio. To do this, do not forget to compare the offers in this area thanks to the various online comparators. You can change company regardless of the type of loan, you just have to respect, at the end of your contract, the notice period provided for by law. He is 3 months old.