Loans are a convenient financial tool to help buy that dream home or that swanky new car. But what if before repayment of the loan, anything untoward happens to the person who has taken a loan?
Any loan taken by you, in fact, represents a risk in terms of repayment for you as well as your family because this is a liability that has to be repaid to the lender. The major risk is that if anything happens to the borrower, then the family might be saddled with a loan they might find difficult to repay under the changed circumstances.
In a bid to help people in such times of crisis, some insurers these days are offering a special type of insurance with the objective of providing protection to one’s family.
Known as Loan Protection Insurance, these plans are designed to protect the loan taker from emergency situations and could be a perfect tool at such times to ease the burden of the loan on the dependent family members. Loan Protection Insurance, in fact, is an insurance policy which offers cover against monthly loan repayments in case of death or unemployment due to disability. Generally used to protect a home loan, it is nowadays also available for personal and car loans.
IndiaFirst Life Insurance, a joint venture of Bank of Baroda, Andhra Bank and Legal & General Group (UK), has also come out with its loan protection plan, named IndiaFirst Group Credit Life Plan, which provides you with a risk cover to shield your family from the burden of your loan liabilities. It is a pure term plan offered to borrowers (of a common lender) against any loan.
Thus, people can fulfill their dreams while securing the financial future of their family by combining their credit and insurance requirement. All loans such as home loan, car loan, education loan, personal loan etc. may be covered under the plan. In the unfortunate event of the member’s demise, the member’s family will not be burdened with the outstanding loan repayment. The insurer will pay a lump sum amount (as per schedule) immediately to you and any excess amount over the outstanding loan amount to the nominee through you.
No need to say that insuring a liability should form a part of every individual’s insurance calculations to ensure the family lives the same quality of life even after the borrower or the bread winner’s death.
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