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Personal Loan Insurance – Should You Consider?

I have had an experienced cash crisis recently. I was thinking to borrow some money then from a friend or relative of mine, but I dropped that idea. I seldom request anybody to lend me money or any thing like this. Cash withdrawal from credit card could have been a better option instead. However, I instantly dropped that idea too as borrowing charges from credit cards were high enough because of high rate of interest (normally up to 3% a month) after expiration of a fixed period, say 50 days. Finally I’ve decided to go for a personal loan because it was fast in approval and hassle free.

A personal loan is a great option to have your funds for consolidating your debt and you can take personal loan to further your higher education, repairing your car, or even taking up a vacation.

You may know that personal loans, just like credit cards, can be secured or unsecured. Secured loans are often much riskier because you may have to ensure the repayment of the loan by providing the lender with collateral security. If anyhow you fail to meet that repayment, the lender will legally repossess your property, vehicle, or what ever asset you used to secure the loan.

But don’t be worried thinking about the failure. Personal loan is still a better option and offer plenty of opportunity for individuals to improve their overall financial condition. But you should develop a habit of good money management skills. However, certain inevitable incidents in life can changed everything and you may not have control over those things such as unexpected death of the lender, loss of employment, or becoming a disable person.

Skipping the first issue of unexpected death of creditor, rest of the things can affect our ability to repay the personal loan. If that loan is of a secured type, you may lose your asset as well, being a collateral security.

Now to protect yourself against all those probabilities, you should consider purchasing a personal loan insurance. Being an insurance guy,I would suggest you to actively consider the insurance option.

I personally feel that personal loan insurance is the best protection you ever have for repayment of the loan and ensures you to have a peace of mind during the repayment term if opting for a secured one. The cost of such insurance, however varies and is generally determined by the outstanding balance of your loan amount. The type of personal loan insurance coverage will also affect the premium too.

There are three types of personal loan insurance coverage to choose. For Americans, the specific dollar amount of coverage will depend on the laws in your State and the dollar amount of your loan. But I always suggest you to discuss the matter regarding your personal loan insurance with your lender.

Personal loan death insurance will pay up to a certain dollar amount in the event of death of one of the individuals on the loan. In that case, the nominated person on the policy will be paid in full up to the maximum dollar amount or assured amount. Personal loans generally have a maximum loan amount of $15,000 in the USA.However it is not uncommon for individuals to take out more than that.

Disability Plus personal loan coverage is such type of coverage that most often be purchased for personal loan protection. It will pay you the monthly personal loan repayments(EMI) up to a certain dollar amount. Additionally you will receive a cash payment for a percentage of your loan amount each month to help you with the cost of living expenses.

Involuntary Unemployment Coverage Insurance for personal loans is very popular. This type of insurance will pay you up to a certain dollar amount per month in case your are being laid off.

You may be aware of the fact that personal loan is a great financial tool when you use it properly. Personal loan insurance is a very reliable option to help you ensure to continue your repayments regardless of medical issues, unemployment, or death. And this type of insurance is especially important for individuals with a secured personal loan. Not having a personal loan insurance will create a kind of situation where, not only your credit score will be negatively impacted, you would be end up losing your valuable collateral assets that are tied to your personal loan.

You’ll be happy to know that personal loan insurance is very affordable and can often be purchased through the lender. It is important that you educate yourself properly and inquire about it while you’re looking for such personal loans. Most lenders are readily available and more than happy to discuss about this option with you as it further assures them that they will receive the refund.

The Types of Loan Insurance

If you have taken a loan and you are not sure that you will be able to repay all the installments in time then you should consider taking loan insurance because it can protect you if you fail to repay the installments. The insurance can be taken from the same bank or the lender who has approved your loan if the same bank approves it at the lowest price but there is no such compulsion. You can also consider some other bank or lender to apply for the loan insurance if this could reduce your total expense.

The types of Loan Insurance

Before applying for insurance, you should know the types of the loan insurances you could apply for. There are three types of insurances that could protect you from being a defaulter on your loan. These insurances are the death, disability and unemployment insurance. All these types of insurance are made to secure you’re the amount you have taken from the bank and protect you from being a defaulter.

Death Insurance

This type of insurance could work in the situation if the person who has taken the loan dies in an accident then a person from the same family can be the next responsible person to repay the loan. The person who will be held responsible for the repayment options will depend on the conditions of the agreement. The loan holder will have to decide at the time of taking the insurance that who will be the next person responsible for the repayment.

Disability coverage

If the loan holder gets injured or disabled in an accident or because of some other unexpected medical problems then this coverage will cover the monthly payments of the loan holder. The amount covered by this insurance would depend on the amount as agreed in the agreement.

Unemployment Coverage

If the loan holder was employed at the time of taking the loan and was also sure to repay all the installments in time but becomes unemployed due to any reason then his monthly payments will be secured by the insurance he has taken. The amount that will be secured by the insurance would depend on the amount agreed in the insurance agreement. If you have taken a loan, the repayment of which depends on your monthly income then you should also take the unemployment coverage because no one knows what will happen tomorrow.

These insurances may increase your expense but will also secure your loan and security is necessary and important to fight against all the unwanted situations such as death, disability or unemployment. If you have covered your loan by a suitable insurance scheme then you or your responsible family members will get more time to repay all the installments if the unwanted situations happen. The loan insurance would not only give you more time to manage the balance payment but will also protect your credit score and thus it will always be easier for you to apply for the next loan when needed.

Loan Insurance – All You Need to Know

Most people are required to take a loan of some sort or the other, at various points of time in their lives. Most of them are also plagued with the fear of being unable to pay their monthly loan repayments due to some financial crunch. But now they don’t have to feel scared because they can make use of the loan insurance concept that is slowly catching up all over the globe.

Loan insurance is a kind of a protection insurance that you can undertake to safeguard yourself against inability to make monthly loan repayments. It is a form of payment protection insurance that you can undertake to help cover you when you are unable to make your loan repayment due to some kind of an illness or an accident. In most cases, this insurance is taken up to cover home loans, personal loans or even car loans.

Advantages

In case of a personal problem or tragedy, you can be sure that your loan payments will be made, thanks to the insurance on loan coverage you have. People who suffer from sickness, loss of job, accident, death or any other kind of disability, leading to inability to pay the EMI’s on loans taken will benefit greatly from this kind of insurance. With your insurance taking care of your loan monthly repayment, you no longer have to be worried about the pressure being put on your family.

There is an option to undertake joint loan insurance by those who have taken up a joint loan application, giving you and your partner coverage at the same time. This scheme is very effective for partners as there is a constant reassurance that if either of the partner is taken ill or is involved in an accident or passes away, the repayments on the loan will be made on that person’s behalf.

Now the question arises on the types of loans that are covered under the loan insurance. In most cases, an insurance on loan is usually provided for borrowers of home loans. But certain banks are known to provide the insurance on auto loans as well as other personal loans.

Insurance Premium

Like any other kind of insurance, premiums are required to be paid in the case of this type of insurance as well. The amount of premium charged will differ from bank to bank. Very few banks even allow the insurance to be taken without the requirement of a premium to be paid.

The amounts of premiums that are charged on insurance for loans depend upon certain factors such as the age of the insurance holder, the amount of loan being insured, the medical record of the person taking the loan etc. The higher the person’s age, the higher will be the premium. Similarly, a higher loan amount being insured will lead to higher premiums being charged. Also, if the person’ medical records show a good status, a lower premium will be charged on the insurance. A serious ailment or a poor physical record will automatically rise up the premium amount.

The Best Car Insurance Rates

If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.

In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.

Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.

Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.

Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.

Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.

In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.