Personal Loan: Have you taken or plan to take a personal loan? Then today’s report is for you. Did you know that you can insure on loan too? Sound amazing? But it’s true. A personal loan comes under the category of unsecured loan. It is considered to be the loan with the highest interest rate. Many times we are forced to take a personal loan to meet our expenses in times of emergency. But do you know that personal loans can also be insured? Such insurance can prove to be very helpful in saving you from the burden of loan EMI in bad times.
What is personal loan insurance?
Personal Loan Protection Insurance (PPI) is an insurance policy that you can buy for financial protection in times of crisis. PPI acts as a safety measure. In case of job loss or disability, PPI covers your loan repayment for the remaining period. A personal loan protection insurance policy operates like any other general insurance policy. You have the option of paying the premium in a lump sum amount. If you want, you can choose to include it in your equated monthly installments, i.e., EMI. The premium for PPI depends on factors like loan amount, age, health condition, and service time.
Benefits
It protects borrowers and their families from future difficulties. There may be situations in the future that may cause financial difficulties. Personal loan insurance protects borrowers from the impact on their credit score due to late payments. This insurance reduces the financial responsibilities of your family by paying off the outstanding loan in case of the death of the borrower. If the borrower becomes unable to work due to an accident or illness, the insurance pays the loan EMI for that period. On the other hand, if the borrower loses his job, the policy pays the loan for a certain period.
This depends on your loan amount. According to the Bank Bazaar report, if you have taken a personal loan of Rs 5 lakh, then you should take insurance of an amount equal to 5 or 10 EMIs of it. To start the personal loan protection insurance claim process, you will have to contact your insurance company. You will have to inform the company about why you are not able to pay the EMI. You will have to provide details of your personal loan. You will have to provide details of the policy. If you have had an accident, you will have to share medical records and bills. After investigation, the insurance company will decide whether your claim will be made or not. If the claim is accepted, the company will pay the remaining amount of your personal loan.
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