Life is full of what ifs… Like what if you suddenly fell ill and couldn’t work, or what if you were to pass away unexpectedly? Making sure you’re prepared in the event that one of these ‘what if’ scenarios comes to pass, may prove beneficial, especially when it comes to making sure your debts are covered.
Loan insurance is designed to cover policyholders when they are suddenly unable to make their loan payments. Whether due to job-loss, disability or death, loan insurance is the ultimate ‘it’s better to be safe than sorry’ protection policy that can really come in handy, if or when an unexpected life event comes along.
Standard loan insurance, also known as credit relief protection, often offers short-term coverage, covering between 12-24 months of payments, while comprehensive packages can pay off your loan balance in-full, if necessary. This protects you from falling deeply into debt if you get injured or lose your job and can also protect your family in the case of you passing suddenly.
Types of loan protection
Job-loss insurance can cover your loan payments if you were to lose your job through no fault of your own. This coverage includes instances such as layoffs or business closures, but usually does not apply to those who are self-employed or on contract. Most policies usually come with a 30-day waiting period before your payments are taken over, depending on when you file with your insurance company.
Disability insurance protects you in case you experience an accident, injury or illness which prevents you from working. Since you can’t work, disability insurance will cover your loan payments when you aren’t receiving any income. Disability insurance on your loan can even be claimed if you are already receiving disability insurance through your work, as the loan insurance specifically covers loan payments.
Life insurance will payout your loan balance in the case of your accidental death or death due to a critical illness. This can include death related to a number of health complications such as: heart attacks, strokes, or even if you happen to pass during some sort of invasive surgery. However, this does not cover death that is associated with a pre-existing condition. Most life insurance plans won’t even insure someone with a pre-existing condition, unless you have been cleared of that condition for at least a year by a doctor. Life insurance gives you and your family peace of mind knowing that your loan will be paid, should the policy holder pass away, unexpectedly. This way your loan is covered and your family won’t have to worry about repaying your debt in the event of your death.
Loan protection is a smart way to ensure you’re covered when something unexpected happens in your life. Just make sure you read over your terms and conditions to see what is included and excluded before deciding which policies work for you. The peace of mind gained by paying a bit extra on top of your scheduled loan payments could make all the difference if things go sideways and money is tight. As they say, one can never be too prepared, and you’ll thank yourself later if you decide to pay the extra for insurance and are fully covered in case something goes wrong.
LendCare offers a convenient 3-in-1 loan insurance solution that includes job-loss insurance, disability and life insurance - all for one low fee. We provide standard and comprehensive packages that can be customized to fit a customer’s specific needs. Loan protection will ensure your loan is taken care of and that a worst-case scenario isn’t the end of the world.