What is the creditor's insurance?

The creditor can protect his / her interest on loan using the creditor insurance. This will equalize the creditor if the debtor dies or is deactivated before the loan is fully repaid. In general, the debtor pays for these insurance contracts. Such policies may be compulsory or voluntary depending on the type of loan and creditor's requirements. Police in the area of ​​life insurance pays a flat amount or the advantage of death if the insured dies. The disability insurance pays a monthly amount if the insured is deactivated and cannot operate. If a person can return to work, payments of the disability will stop. Group policies are generally cheaper than individual types. The creditor is the owner and recipient of the group's policy. The debtor is known as insured .

For example, a bank wants to insur all your mortgages. The Bank asks for a group creditor's policy. The insurance company weighs the risks of the whole group with the price of politics. Each customer pays a fee called a bonus to be included in politics. As a result of jE that Bank customers pay a lower fee than if everyone bought an individual insurance.

Reduction of term life insurance can be used to cover the mortgage loan. Because the customer pays a mortgage every month, an outstanding balance - the amount that is insured - is reduced. The amount of death will be reduced to match the remaining loan balance. As a result, bonuses can also be reduced every month.

creditors insurance can also be used to insurance for credit card balances. These principles are sometimes called credit card protection programs . The customer may decide to buy a life or disabilities disabilities, or both. Policy costs change each month based on credit card balance. When the customer has a balance on the credit card zero, the month is not due.

Banks can also use creditors' life insurance for business loans. If BankovnLoans lend money to the company owner, the bank may require the owner of life or insurance for health disabilities. Such principles help ensure that the loan is repaid. This coverage is particularly important if the work of the owner creates a main source of income for his company.

It is important to realize that the proceeds or the dose of the death of any creditors' insurance contract is paid to the creditor, not the insured family. A person would have to buy separate insurance or insurance insurance to protect their family in the event of illness or death. Politics of life and disabilities can only be purchased from an insurance agent with a license.

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