Many people take out a repayment insurance policy when they arrange a loan at a bank, they simply convince them that it is needed. Even if they have a life insurance policy, they pay the ability to pay, for example, for two or three loans. But is it really necessary?
Insurance arranged directly at the bank is called bancassurance. It does not have to be just a repayment insurance, it can be virtually any insurance arranged at the bank. From the point of view of how it should work, virtually nothing can be argued against, but considering how it actually works, it is not so famous.
The principle of bancassurance often does not correspond to the insurance conditions actually negotiated
Of course, it is natural and responsible that the client wants an insurance policy that will protect their ability to repay the loan if they fall ill, lose their jobs or change their jobs. Such reasoning is absolutely logical. But the second is the real conditions under which such insurance is concluded. For such insurance products, there are always a number of “but” that are not covered by the policy. And the “but”, which is not covered by insurance, is often far more than what the insurance covers.
The right solution is not to close such insurance in the bank. Just credit and insurance policy separate. Just as it is good to separate investment and insurance. If you combine everything together, it will create a freak that will cost you dear. Arrange a loan in the bank, arrange a mortgage in the bank, and when they tell you that you need some insurance, make it with the insurance company or an advisor who knows it, but always separate.
Will the life insurance risk be treated?
The percentage of insured performance in the case of the payment capability insurance in banks is very low and is in the order of percentages. The insured loan can even end up with execution
It is good to arrange all health-related risks in life insurance, which is absolutely sufficient. And if you are afraid that you will not be able to repay loans due to loss of employment or for reasons related to your income, ie financially, not medical, it is best to choose the form of collateral with the provision created.
The proper construction in this case is a mortgage or other loan and life insurance for medical risks. Set up loan repayments so that you still have hundreds of crowns, at least a hundred crowns a month, and make a reserve in case you are temporarily unable to repay the loan. At that moment, it doesn’t matter whether you deposit this money at home in a cup or a savings account, it is more about your morale than about profitability. And you should have such money available when you need it. It is better than paying insurance that has so many exclusions that it will never be anything.