Alexa Seleno

Requirements for consumer credit insurance

Juil 10, 2023
Requirements for consumer credit insurance

A consumer loan, like any other loan, must be repaid, according to the conditions agreed in the contract.

During the repayment period, certain life events such as disability or work stoppage may occur. These various hazards of life can be guaranteed and protected by insurance. It is responsible for repaying the monthly loan payments, instead of the borrower. Also, in the event of death, this payment would simply go to his heirs. Consumer loan insurance provides real security for the borrower and his family, without forgetting, and above all, the lending institutions.

The relevance of consumer credit insurance

As explained above, in consumer credit, taking out borrower insurance is used to protect the borrower against the vagaries of life or to guarantee certain risks. Even if it is systematically offered to customers, this insurance is not compulsory for consumer credit. However, it turns out to be very useful when the borrower decides to borrow a large sum of money. Also, the main guarantees put forward by banks and credit organizations are as follows:

– death insurance. It supports the repayment of consumer credit if the borrower were to disappear, financially protecting his family and his heirs,

– invalidity insurance. It takes over from the reimbursement of consumer credit in the event of total or partial disability,

– health insurance. It is intended to cover the payment of monthly loan installments if the borrower suffers a work stoppage recognized by Health Insurance. This anticipates any possible indebtedness,

– job loss insurance. It is only intended for borrowers who hold an open-ended employment contract. As a warning, the process of taking charge of this insurance only begins after a waiting period following the loss of employment observed. Click here for more information on the subject.

Use a consumer loan insurance comparator

Of course, consumer credit insurance has a cost. Indeed, the borrower must contribute to have this additional coverage, to inevitably increase the overall cost of repayment. The rate of this insurance represents less than 1% of the capital borrowed, if this rate varies from one bank or credit company to another. The market offers two types of insurance:

– DMI insurance, which covers death, illness and disability,

– DMIC insurance, which covers death, illness, disability and unemployment. It is not offered by all professionals, to be more expensive than the first.

In order to save money, the borrower must compete. A proposal made by a lender is not necessarily the most interesting, at the level of the tariff than guarantees. The use of a consumer loan insurance comparator is strongly recommended.

The magazine-insurance team of editors at your service! We look at all possible and imaginable information on insurance in order to help you sort it out. We strive to offer you quality articles to help you better understand the issues of this or that insurance.

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