Bank finance articles and tips

Credit insurance is one of the forms of an insurance policy with an implied protection to the policyholder against non-payment of loan or credit debts. It is available in different kinds of coverages including property insurance, disability, involuntary unemployment and credit life. This type of insurance renders financial assistance to the policyholder, who incurred a secured loan and is worried how to repay the debt, if died or become disabled or the mortgaged property gets damaged due to unavoidable circumstances. So, with this excellent and inexpensive way of credit insurance, a borrower can ensure safely repayment to the borrowed loan during financial setback owing to physical or unforeseen circumstances.

Credit insurance involves premium outgo on a monthly basis. Repayment of the premium is quite a subjective matter of the credit insurance company. It is important to note that the policyholder can designate beneficiary to the lender, not the family member or relative. More so, if one avails the policy against disability, then the insurance company is responsible to pay the monthly payment on behalf of jobless or physically disabled policyholder. Hence, with no hassle of repayment of the loan borrowed, meanwhile, the policyholder has enough time to get back on feet to start repayment again.

Various types of secured loans like home loans or car loans available in the market these days require credit insurance to ensure that the payment of the loan borrowed should not be hampered due to unforeseen circumstances with the borrower. To ensure continuity of the payment of the loan, the credit insurance policy functions as a linchpin between the lender and the borrower.

Credit insurance is available in various forms, details of which are mentioned in the following paragraphs?

? Credit Property Insurance: This type of credit insurance ensures safety of the property to be mortgaged to obtain a loan. if the property is damaged or lost owing to certain unavoidable circumstances, the company pays compensation.

? Credit Disability Insurance: As the name itself suggests, this type of insurance covers for medical disorders, accidental cases causing physical disability and other injuries experienced by the policyholder within the continuity of the loan borrowed.

? Credit life insurance: If the borrower dies, the insurance company compensates for the total or major fraction of unpaid loan amount to the borrower. The concept is somewhat identical to that of having a life insurance policy.

? Involuntary Unemployment Insurance: If the policyholder becomes jobless or experiences loss in business undertaking, and he is not able to afford payment of the secured loan borrowed, then the insurance company compensates for the due payment.

Credit insurance is quite optimal to hedge your debts. One should go for it to ensure continuity of the loan borrowed if the borrower can?t pay it. Apply for Life insurance from birla sun life insurance company