The insurance acts as an umbrella that protects us and our family from the effects of unpleasant life events, which have a financial impact. For example, when we run out and the family depends on our earnings, the money from insurance will cover the repayment of the cash loan.
The obligation to settle the liability falls on the insurance company
However, not always to the full extent, so remember to carefully read the insurance conditions, especially the part in which the exclusions are listed, i.e. situations not covered by the policy.
Insurance usually covers job loss, death, temporary or total disability, disability, hospitalization or serious illness.
Banks offer various types of packages
from the basic to the extended version, which protects one, two or more risks. An interesting solution is the Bank Millenium insurance offer, which includes the risk of losing a job, total or temporary inability to work, disability due to an accident, serious illness and death.
The bank does not make us choose a specific issue that will be protected, but provides a package of 5 risks, the scope of which changes automatically, adapting to changes in the borrower’s life.
Credit insurance – yes or no?
According to Recommendation U, which has been in force since April 2015, when taking a bank loan we can choose the insurer ourselves or take advantage of the policy we already have. However, it must cover similar risks to the financial institution’s proposal. The bank cannot impose a specific offer on us – we are free to choose it, but again – the policy must meet the requirements of the lender.
It is worth noting, however, that if we choose non-bank insurance or opt-out of it at all, then we must be prepared for the fact that the cash loan will be more expensive. In this situation, the bank usually charges a higher margin. In making the final decision, recalculating costs in the case of a loan without insurance and with a protection policy will help.
The insurance is usually payable in advance, which in the event that we can repay the loan earlier, entitles us to apply for reimbursement of premiums for the unused period.