Why do you need life insurance for a consumer loan?
Posted: Tue Feb 18, 2025 10:22 am
Taking out insurance when taking out a loan is additional financial protection for the bank and the borrower. In this article, we explain why personal insurance is needed when taking out a loan, how it affects the terms of the loan agreement, and what its advantages and disadvantages are.
Types of insurance for consumer credit
Insurance, which is issued together with the loan, can be property and personal. The first protects against loss of property and property rights, the second covers risks associated with loss of income and ability to work.
Most often, they offer to arrange financial protection of life and health. Insurance risks, as a rule, include:
illnesses and injuries that increase expenses and make the borrower temporarily incapacitated;
hospitalization;
disability groups I and II;
death.
If an insured event occurs, the policy covers the costs of treatment find your mobile number database and also takes on the fulfillment of the borrower's debt obligations.
Along with the loan, insurance against job loss is also often issued. It covers situations when the borrower loses income not of his own free will and not through his own fault - for example, he is laid off or loses his job due to the liquidation of the company.
Property insurance is typically used when taking out a secured loan, including mortgages and car loans. It is a requirement for this type of security. Other types of financial protection are optional, but they may affect the terms of the loan.
Types of insurance for consumer credit
Insurance, which is issued together with the loan, can be property and personal. The first protects against loss of property and property rights, the second covers risks associated with loss of income and ability to work.
Most often, they offer to arrange financial protection of life and health. Insurance risks, as a rule, include:
illnesses and injuries that increase expenses and make the borrower temporarily incapacitated;
hospitalization;
disability groups I and II;
death.
If an insured event occurs, the policy covers the costs of treatment find your mobile number database and also takes on the fulfillment of the borrower's debt obligations.
Along with the loan, insurance against job loss is also often issued. It covers situations when the borrower loses income not of his own free will and not through his own fault - for example, he is laid off or loses his job due to the liquidation of the company.
Property insurance is typically used when taking out a secured loan, including mortgages and car loans. It is a requirement for this type of security. Other types of financial protection are optional, but they may affect the terms of the loan.