Taking out insurance can then provide a solution. Is this necessary and what are the possibilities?
If you take out a loan, the credit provider will check whether you can pay off or repay this loan. Based on, among other things, your income and obligations, it is determined whether and how much money you can borrow . However, no account is taken of unforeseen circumstances. It is important to think about this beforehand, especially if you have a partner or family.
What happens to the loan on death of you or your partner? And what is the risk of incapacity for work or unemployment? These are things that you (rather) do not think about. Are you going to take out a loan then it is good to think about this beforehand.
An analysis shows that a third of the people who take out a loan are covered by a death insurance. This concerns the loans or loans offered by major banks. The costs for this coverage have already been passed on in the interest rate of the loan, so that these loans are often somewhat more expensive. Pay attention to whether the entire debt is waived. Sometimes the entire loan is not insured but a maximum amount applies.
If you are going to take out a credit that does not include standard death cover, you can also take out a life insurance policy yourself. You prevent your survivors from being saddled with a residual debt. You can easily take out this insurance loan yourself. You then pay a monthly premium on the insured amount. The insured amount will then be paid out on your death.
You can choose from a life insurance policy whereby the amount to be paid remains the same and a variant where the amount to be paid decreases. The first insurance fits best with a revolving credit and the second fits better with a personal loan. The minimum amount for a life insurance policy is € 10,000 (even if you borrow less). You can, however, cancel the insurance (after a year) immediately and without penalty.
If you become incapacitated or become unemployed, your income will decline. You can then run into problems with paying off the loan. With a payment protection you can insure yourself against this. You will receive a monthly payment and with that you can pay off the loan.
Unlike with a mortgage, a mortality risk insurance with a revolving credit or loan is not mandatory. It is up to the customer to assess the risk and take his or her responsibility.