All About Consumer Credit Insurance. A consumer loan, like other loans, must be repaid according to the terms agreed in the contract.
Certain life events such as a disability or sick leave may appear during the payback period. These various life hazards can be guaranteed and protected by insurance. Responsible for the repayment of monthly loan payments in place of the borrower. Also, in the event of death, this payment would return only to his heirs. Consumer loan insurance provides real assurance for the borrower and his family, above all for lending institutions.
The Relevance of Consumer Credit Insurance
As explained earlier, in terms of consumer credit, taking out debtor insurance serves to protect the borrower from the uncertainties of life or to guarantee certain risks. Even if it is systematically offered to customers, this insurance is not compulsory for consumer credit. However, it turns out to be very useful when the borrower decides to borrow a large amount. Besides, the main guarantees given in advance by banks and credit institutions are as follows:
– Death Insurance. It takes care of the repayment of consumer credit if the borrower disappears, financially protecting his relatives and his heirs,
– Invalidity Insurance. It takes over the repayment of the consumer credit in the event of total or partial disability,
– Health Insurance. It is intended to support the payment of monthly loan payments if the borrower suffers a work stoppage recognized by Health Insurance. This anticipates any possible debt,
– Job Loss Insurance. It is only intended for borrowers who have an indefinite employment contract. As a warning, the process of taking charge of this insurance does not begin until after a waiting period following the observed loss of employment. Click here for more information on the subject.
Use a Consumer Loan Insurance Comparator
Obviously, consumer credit insurance has a price. In fact, the borrower must have this additional collateral, contributing to inevitably increasing the total cost of repayment. The rate of this insurance represents less than 1% of the borrowed capital if this rate varies from one bank or loan company to another. The market offers two types of insurance:
– DMI insurance, which concerns death, illness, and disability,
– DMIC insurance, which covers death, illness, invalidity, and unemployment. It is not offered by all professionals, to be more expensive than the first.
In order to save money, the borrower has to compete. A proposal made by a lender is not necessarily the most interesting, in terms of the price that guarantees. The use of a consumer loan insurance comparator is strongly recommended.