May 25, 2024

Credit Life Insurance

There is a certain risk when you take out a loan, especially if you are borrowing a large amount. If you die or become disabled, you may be worried that your relatives have to take on your debts. Overdraft life insurance takes the risk of your debt if something bad happens to you.

What is a life insurance loan, what is the use of insurance when taking out a loan, and you can find answers to many more questions on our page. 

What is Credit Life Insurance (Policy)?

Credit life insurance; It is a type of private life insurance that aims to pay off outstanding debts in case the debtor dies or becomes disabled before the debt is fully repaid. Credit life insurance helps reduce potential risks by insuring both your relatives and the lending institution.

Is Life Insurance Mandatory When Taking a Loan?

It is not obligatory to have life insurance while taking a loan and there is no legal regulation on this issue. Banks provide life insurance to their customers when taking loans. The reason why banks offer overdraft life insurance; In the event of the death of the debtor, it is to secure itself by taking the existing debt to the bank from the insurance company as compensation.

If you want to secure your loan with life insurance, we recommend that you do market research first. While the policies offered by banks are generally more expensive, you can get policies at more affordable prices than alternative insurance companies that provide the same assurance.

Regardless of which bank your loan comes from, you can get your loan life insurance from Fiba Emeklilik at more affordable prices. To get Credit Life Insurance, you can contact us at (0216) 368 45 45 .

What are the Benefits of a Credit Life Policy?

There are times when an unpaid loan can have a negative impact on your heirs. Why should I get credit life insurance, what are the advantages of credit life insurance, let’s take a look together.

  • You don’t want your property to go against your debts: In the event of your death, the asset you borrowed on the loan – like a car or house – can be sold for repayment to the lender. This can reduce the amount left to your heirs. Credit insurance covers outstanding payments if you die and keeps the debt off your property.
  • If you want to protect the guarantors: When you sign a loan with the guarantor, you are equally liable for the debt. Credit life insurance repays the unpaid debt to the bank in the event of death and removes the burden of the surviving guarantor.
  • If you live in a community property and want to protect your spouse: In some cases, your debts will pass to your spouse. A credit life insurance policy provides assurance that your spouse does not have to pay off debts.

Who Can Benefit From Credit Life Insurance?

Life insurance can be taken out by anyone over the age of 18 who wants to get coverage against various risks. There are not many criteria among the general terms of credit life insurance . Anyone between the ages of 18-75 can apply for credit life insurance.

Why Should You Have Life Insurance While Taking a Loan?

Life insurance pays compensation in the event of the insured person’s death or permanent disability. In this respect, life insurance is a kind of risk insurance. Most people get life insurance not at their own request, but when they get a loan from a bank.

When a consumer loan, housing loan or automobile loan is withdrawn from the bank, the life insurance issued in the name of the applicant basically repays the debt to the bank in case of death. In other words, in case of death of the insured, the compensation to be given as a guarantee is paid to the bank because it is the same amount as the withdrawal from the insurance if the bank is the legal heir in the loan agreement. In this context, although not mandatory, banks want to provide life insurance on behalf of the lender.

What Does Life Insurance Cover While Taking a Loan?

A loan life policy is usually sold by banks at the opening of a mortgage; may also be offered when you get a car loan or line of credit. In case of death or permanent disability, you can protect your heirs as your security will pay the loan. If your spouse or someone else is signing a guarantor on your mortgage, loan life insurance will protect them from making loan payments after your death.

What are Credit Life Insurance Coverages?

We can list the areas covered by life insurance when taking out a loan as follows: 

Death Coverage: Credit life policies include death benefits corresponding to the borrowing maturity and decreasing over time and corresponding to the unpaid debt over time. By lending money, banks accept the risk of death of the borrower. Therefore, credit life insurance does not only protect your heirs, but the lender as well.

Full and Permanent Disability Coverage: In the event that the insured suffers a complete disability within 2 years as a result of an accident or illness, compensation is paid to the insured in the amount and rate specified in the policy.

Is Credit Life Insurance Renewed Every Year, How Long Is It?

In credit life insurance, the insurance period is valid for the term of the loan. An annual automatic renewal order can be issued for policies with a shorter maturity period.

How are Credit Life Insurance Prices Calculated?

Credit life insurance calculation procedures; The collateral limit depends on the age, loan balance, loan term and monthly interest rate of the loan. In the calculation of personal loan life insurance, calculations are also made according to the decrease in the collateral over the years when using a loan. You can also get a tax refund of up to 15% , as the premiums you pay will be deducted from your tax base .

“What is credit life insurance prices 2022?” If you are wondering, you can contact us at (0216) 368 45 45.

How to Pay Credit Life Insurance Premiums?

The insurance premium is usually automatically deducted from your account when you take out a loan. You can also pay by credit card, in cash or in installments.

How to Apply for Credit Life Insurance?

Usually, banks automatically apply on your behalf when giving loans. However, you can also get an offer from us for life insurance with credit, which you can get much more affordable . We prepare the policies that offer the most suitable and comprehensive coverage for you and can provide detailed information through our experts.

Cancellation of Credit Life Insurance

“How to get credit life insurance back, is credit life insurance refundable?” We often hear questions like: 

If overdraft life insurance cancellation is required, you can cancel your policy and get a refund for your premiums. However, cancellation policies differ between lenders and insurance companies. Before purchasing a policy, it’s best to find out if you can cancel coverage early and what kind of refund policy, if any, is available.

Frequently Asked Questions About Credit Life Insurance

Can I Have More Than One Life Insurance Policy?

You can have more than one life insurance policy in accordance with the procedures of the insurance company you prefer.

Do I Have to Buy Credit Life Insurance from the Bank From Which I Get Loan?

No, you do not have to take out a life insurance policy from the bank from which you took the loan. You can get credit life insurance from any insurance company at more affordable prices.

If I am unemployed after using a loan, will my loan installment be paid?

If unemployment coverage is added to the credit life insurance, the installments are paid by the insurance company in accordance with the special conditions of the policy. In order to benefit from unemployment coverage, you must be a payroll employee in the private sector. When taking out life insurance, we strongly recommend that you ask whether there is unemployment coverage within the scope of your policy.

Does Life Insurance Pay the Heirs of the Loan Debt Invested by the Deceased Person?

If the deceased has paid off part of the loan debt, the paid amount is returned to the heirs. However, if there is a situation different from the items in the special conditions of the insurance company, the insurance company may refuse to pay back the heirs. The heirs must first apply to the bank in order to receive a refund.

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