Life insurance is undoubtedly an important issue, information about which is useful to know everyone. And in the context of the credit issue, life insurance becomes important for both banks and borrowers. Each participant of the credit transaction (in our case, the Bank and the borrower) tries to minimize the risks. Well what is life insurance?
What is Life Insurance?
From this point of view, life insurance of the borrower for the Bank is a guarantee of return of funds. For the borrower it is a guarantee that even in case of an accident the debt to the Bank will not be transferred to family members and will be paid in full.
Life Insurance and Its Importance
Simply put, life insurance is an insurance agreement that allows an individual to pay insurance premiums to insurance companies and pass them on to heirs in the event of death. The regulation of life insurance, which was introduced in 2012, provides for the following types of life insurance: Life Insurance in the event of death (Full Life and/or Limited Term Life Insurance), Life Insurance, Mixed Life Insurance, Marriage-Birth Insurance, Capital Redemption Insurance, Investment Funded Insurance.
Many people use loans offered by banks to meet their needs. However, when you want to apply for a loan, you will see that in all banks life Insurance is a prerequisite for granting a loan. Employees of the Bank highly recommend the use of insurance for each borrower. Such insurance is designed to take action against possible risks you may face in life, and fees are charged in various amounts in the form of monthly premiums. Upon the occurrence of an accident that led to the disability or death of the borrower, the insurance benefit will be transferred to the legal heirs. In addition, if the borrower has a life insurance policy, his or her legal heirs will be entitled to return premiums paid.
The Importance of Insurance in the Use of Credit
If you apply for a loan, the Bank provides you with life insurance for the entire period of repayment with an annual insurance policy. In case of death of the insured person within the established period of 1 year, the insurer shall pay a certain amount of money for the insured event. In case of death of the borrower, his heirs and guarantors will not be responsible for the loan debt. It is important that the life insurance policy is updated every year to ensure the continuation of the insurance. These conditions are valid for two types of life insurance: Full Life and Limited Term Life Insurance.
Possible risks such as total disability or death are covered by Full Life Insurance. The duration of such insurance can be determined from 2 to 20 years. Upon the occurrence of an insured event, the borrower or his heirs receive substantial monetary compensation. Limited Life Insurance can be arranged for a limited period of 5, 10, 20 years.
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