When taking a cash and payday loan, we often have the option of insuring it. Such protection allows us to reduce the risk of our insolvency, but it can also improve the terms of the loan, for example lowering the interest rate. Of course, loan insurance is an additional cost to repay. Is it worth to decide on that?
Virtually every bank, and also many non-banking institutions, gives you the option to insure a loan against unforeseen situations. We can not only receive protection in the event of death, but also when we lose a job or become seriously ill. Of course, such an additional insurance affects the overall cost of the loan, so then the payday will be higher than if you would not have benefited from the insurance.
Most often, the customer has the choice whether to choose insurance or opt out of it. It also happens that an institution, instead of a specific security, proposes to the borrower to purchase insurance. In addition, when buying a policy, we can often count on additional bonuses, such as a promotional margin or lower interest rate.
Of course, we can also meet with loans that are absolutely required when signing a loan agreement, which is why the customer can not resign from the service.
Usually, we have one policy at our disposal, but it happens that an payday loan can also be secured more comprehensively, for example with extended insurance. Most often, insurance policies include health insurance, in the event of job loss, but it can also be standard life insurance. When there are circumstances allowing the use of the policy, the bank will be able to collect the liability from compensation.
It is, however, good to read the terms of the contract, because it may turn out that the policy has many exemptions. In principle, the widest protection is able to guarantee us a life policy. This type of insurance also allows us to cover the entire liability in the event of the borrower’s death.
The insurance premium is calculated on the loan amount and on the number of paydays to be paid and is charged together with the payday to be paid each month. If, therefore, we have a higher amount of liability, as well as a longer repayment period, then the policy will cost us more.
So, is it worth insuring a loan ?
Essentially, yes, because, as the proverb tells us, he is always insured. However, on the other hand, we should remember that the policy does not always pay off. If we take a smaller loan for a short period, then it will simply not be a viable solution in this situation, because it will increase our paydays, and the protection we receive will work, but there will not be much to repay.
Top insure the loan paydays amounting to the higher amount and loan bank concluded for a longer time and higher sums, for example, loans , mortgages, car loans. Then, insurance in emergency, unforeseen situations will really help us and relieve us and our relatives.