These kinds of Insurance guarantees the debt balance that has the insured with a financial institution in case of natural death or accident.
These kinds of Insurance guarantees the debt balance that has the insured with a financial institution in case of natural death or accident.
In these cases, the policyholder and in turn the beneficiary to the extent of the insurable interest is the bank or financial institution.Banks offer their clients various types of insurance, usually in order to ensure payment of the fees contracted mortgages.
Besides, customers are protected against the red numbers due to economic contingencies such as the death of a spouse, own temporary disability, disability or unemployment.
Similarly, when taking out a mortgage loan, applicants may request coverages that allow them to be preserved, for example, against rises in interest rates.
Many persons ask about how much it will cost these hedges and if in their particular situation pay for its worth.
There is a wide range of policies in the Insurance market, but the most important is what level of protection you want to according to your needs. These products may be a response to a situation of indebtedness but sometimes not a definitive solution.
The responsibility of the company extends to cover the cancellation of the secured debt balances, in case of death and total and permanent disability of the insured debtor.
Each insured may be covered, either up to the total loan amount or including outstanding balance (principal plus interest) at the time of the accident.
Eligible people for this insurance coverage are, affiliated debtors, banks, credit cards, credit unions or financial institution in general.
Common insurance coverages:
- Basic Life Insurance (Many Insurance companies exclude suicide)
- Total or Permanent Disability
The insurance covers the arrears and interest, if any, at the time of the incident, which must be reported by the contractor in the same report that sent equity balances of each debtor. And in case of death, the insurance policy will cover the interest that has been generated since the demise debt until the effective date of settlement.
In short, Bad Debt Insurance or Credit Insurance is designed to ensure the “debts”. That is, the loans granted by companies, these service is dedicated to natural or legal persons in case of death, if death does not occur by suicide.
Another risks that could be covered under Credit Insurance:
– Total or partial disability
– Terminal illnesses
– Funeral Expenses