Loans are important tools for any person to fulfill his desires like own house, higher education, etc or urgent requirements like medical emergency, etc. However, a typical fear which remain in the mind of any professional is the risk of losing a job. The EMIs could be killing in bad times when earning are not flowing in. People insure their house but how to buy a insurance for a job. Here the Loan Insurance is proven to be the right solution. Though the concept is relatively new in India but its utility cannot be undermined.
With privatization of various Govt companies and entire new breed of private employers, the security of job is reducing constantly. With rise and fall in economic scenario, the employment or business opportunities also remains volatile. In such situations, people may opt for Loan Insurance. This as a product is generally offered on home loan however few banks are also offering the same on Car loan or education loans. The very reason of this Insurance is to ensure the repayment of EMIs in case of loss of job, accident or death of the borrower.
The unpredictable future always keep us worried and Insurance comes to our rescue at least for the financial matters. Different reasons which prompt for taking Loan Insurance are
- Health reasons
- Loss of job
- Death of borrower
We must remember that insurance is not a luxury but a necessity to keep us ready for bad times. So when bad time comes, Loan Insurance comes to your rescue by taking care of your EMIs.
Defaulting on EMIs is not a very good option even in the worst of times. The default on loan not only bring legal hassles but also deteriorates your credit history forever. Banks usually reports such issues to CIBIL and other lenders refers to them before giving any loan. To avail the product of loan insurance, you need to pay a premium while taking a loan along with details of your job and employer. You need to understand terms of conditions of the Insurance product as it varies from company to company. The loan insurance benefits should be suitable to your requirements and the premium you pay, includes the factors like amount of Loan, tenure of loan, your age and medical history.
Generally lenders include the premium to the loan amount ad increase the EMI to this effect however in case of separate insurance premium payment, it is considered as Life Insurance and ake you eligible for tax benefits under section 80C of Income Tax Act, 1961. So it is the time to be a smart borrower and avail the product benefit for your secure future.