subject: The Benefits of Personal Loan Protection Plans [print this page] Most of the people need to take a loan at some point of time in life. However, people are generally afraid that they might fail to make their monthly loan repayments due to certain financial constraints. This is the reason why the concept of loan insurance is witnessing an increase in popularity all over the world.
Loan insurance is a type of protection insurance that safeguards you against an inability to make loan repayments on monthly basis. It is a kind of payment protection insurance that can be undertaken to cover you against default in payment of loan due to an accident, illness or any other incident. In majority of cases, the insurance is taken to cover personal loans, car loans and even home loans.
A personal loan broadly covers both secured as well as unsecured loans depending on your preferences and personal circumstances. In addition, an unsecured loan is often used for consolidation of debt, purchase of a new car or going on holiday. While applying for a loan, the lender assesses the current debt, credit history as well as income of the borrower. This makes it different from a secured loan since the amount is not supported by collateral in any form.
Personal loan protection plans offer protects you against unexpected circumstances that might affect your ability to repay a loan. Moreover, the cost of this kind of insurance varies in accordance with its price. Generally, it depends on the kind of personal loan insurance coverage you choose. However, it may worth it. This also gives the much needed peace of mind to the borrowers and offers reassurance while taking out a secured loan.
Generally, three different types of personal loan protection plans are available to people. Moreover, you need to consult the lender or insurance broker while taking a personal loan cover. The three types of personal loan insurance plans include personal loan death insurance, accident/critical illness personal loan coverage and involuntary unemployment coverage insurance.
Personal loan death insurance pays up to a specific amount in case of death of the individuals on the loan. However, accident/critical illness personal loan coverage pays monthly personal loan payments up to a specific amount. Similarly, involuntary unemployment coverage Insurance offers a specific amount per month for some months.
The Benefits of Personal Loan Protection Plans
By: Corwin Smith
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