Loan Protection Insurance: Why Do You Need It?

Accidents happen all the time. You may be an accomplished professional living a great life until one unfortunate day when everything turns upside down, all because of unforeseen circumstances.

Loan Protection Insurance

Today, you have a well paying job, you can afford most luxuries in life, including the house of your dreams – all you need is a reasonable mortgage that you can easily afford to pay back with your current salary. You get that mortgage and purchase that home; but a year into paying your EMI you meet a serious accident – one that leaves you bedridden.

You lose your job, you can’t get another one, and there is no other way to pay back the mortgage – what happens then?  Things could have been worse. You could have lost your life. How would have your family coped with that? This is where loan protection insurance can help you keep up with the payments and simultaneously ensure you have a roof over your head.

What is Loan Protection Insurance?

Loan protection insurance provides insurance covers for your loans when going gets tough. Acquiring a loan protection insurance plan ensures that your outstanding loan(s) EMI are duly taken care of in the event of any accident, physical disability, sickness, loss of job, and/or death.

See while you’re alive and kicking, you have the ability to take care of everything. You can take care of the finances and even practice effective credit management. However, once things take the ugly turn – not having a good insurance plan in place can bring substantial distress and trauma for your loved ones.

Insurance providers like Freedom Insurance provide comprehensive loan protection insurance with both life and trauma variations that each fulfills the greater purpose of taking care of your outstanding loans following a tragedy.

Why Should You Consider It?

First things first, there are the obvious benefits that loan protection insurance plans bring:

  • You get to keep your assets. Since the payments are timely made, there is no confiscation/auctioning of the assets.
  • Lifelong savings stay intact. You or your family does not have to exhaust your saving accounts in order to pay off the loans.
  • Lesser financial worries. At least you and/or your family do not have to worry about repaying the loan. The insurance company would take care of that.

In addition to all this, loan protection insurance also provides benefits in terms of:

  • Generally cheaper premium rates. Although the amount of premium charged would depend on a number of different factors.
  • Underwriting process for loan protection agreements is usually simpler than that practiced for other types of insurance products.

Even in a modern world like ours, people question the need for life insurance or any other form of insurance for that matter. What they don’t realise is that life is unpredictable and can at times take a turn that turns your world upside down. Insurance helps soften the blow.

What is your take on insurance? Have you ever invested in an insurance plan? Let us know all about that.