A credit life insurance policy prevents the borrower’s family to repay the loan in the case of the borrower’s death or disability. The following are the advantages to a borrower to buy a credit life insurance policy –
1. Save your family from financial hardship –
If you have credit life insurance, you are not leaving behind debt for your family to pay in case of your untimely death or disability. This policy will pay the outstanding loan amount to the lender and settle your dues.
2. Ease of policy issuance –
Credit life insurance is a good option if you do not have a life insurance policy for yourself. If you are worried about how they will pay your debts, in case of your untimely death or disability, it is a good policy selection. Then can easily issue this policy without requiring any medical check-ups.
3. Bargain on interest cost –
Credit life insurance is a common add-on. Proposed by lenders when you are taking a loan. Therefore, depending on the type of loan, lenders may ask the borrower to enroll in the policy or make it mandatory for all borrowers to enroll. Having this policy reduces the risk of default on the loan due to the death or disability of the borrower. Hence, inclined even the leaders toward offering a discount on interest costs and EMIs. If you are covered under the policy.
4. Premium payments –
The borrower directly pays the premium for this policy. And adds it to the loan amount and built-in EMIs. Hence, the overall process does not put any financial stress on the borrower for life insurance premiums.
So, now we have a clear view of what are the advantages to a borrower to buying a credit life insurance policy.