Loan insurance is everything you need to know each borrower.

Insurance

If earlier the risks that could concern the person were fires, floods and other natural disasters, then at the current moment of citizens are more concerned about the risks associated, directly, with lending.

Here we are not talking about credit obligations for a small amount of funds, these are primarily loans associated with a large amount of funds, such as:

So the insurance company receives advertising and a large stream of customers, where not everyone is subjected to risks, and accordingly removes profit from them. And the financial institution, in turn, minimizes the risks of non-payment of the borrower, since in the event of an insured event, the insurer will repay credit obligations.

In accordance with the legislation of the Russian Federation — financial organizations are not entitled to demand consent to the borrower to conclude an insurance contract. Insurance is a voluntary service where the borrower can refuse, so agreed with the terms.

Risks that are associated with lending can be avoided using two main ways:

Both of these methods are meant by the fact that the potential borrower, during the term of the insurance contract, contributions.

It provides that the insurer undertakes to repay the current debt to the financial institution, in the event of accidents with the borrower. For example, the death of the borrower, the loss of the workplace due to disability or disease.

Advantage

Flaw

It provides that the insurer assumes the obligations on covering losses or the remaining amount of debt in the event of an insured event in the form of loss or serious damage to property.

Advantage

Flaw

Such a situation may arise due to the infringement of the rights, illegal sale transaction or when falsifying documents by the seller.

Advantage

This insurance will be useful if the borrower has reduced at work or the enterprise went bankrupt, and it remained without the main source of income. At the same time, the dismissal on their own will is not included in the list of an insured event.

Advantage

Flaw

However, at the current time, a large number of citizens deal with little on lending in general, and due to its financial illiteracy, when receiving a loan, thoughtlessly arrange insurance, and eventually overpay the large amount of funds.

Therefore, before concluding an insurance contract, thoroughly think about its need. If this is an ordinary consumer loan by 50 thousand rubles for a period of 1 year, do you need insurance?

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