What is Loan Protect Insurance Plan?
Loan protect Insurance plan provides coverage against the loan taken by you. In case of any unfortunate even during the loan tenure your family gets protection against the liability taken by you.
We also provide normal personal loans to meet the needs of any needs be it leisure, home renovation, education or any other requirements.
What are the points you need to consider before taking the Plan?
Most of the banks /financial institutions bundle this as a package into your loan. You have an option to take this insurance cover. Please ensure you to verify the whether the full loan amount is covered or not. Doing a partial cover of your loan amount does not make any sense as you are under covered which is equivalent to no coverage.
There are two types of cover.
1.Fixed Cover
2.Reducing Cover
What is fixed coverage?
The life cover chosen at the beginning of the policy term is fixed throughout the tenure of the loan. If your loan amount is 5 lacs for 5 years and your coverage remains fixed at 5 lacs till the end of the tenure.
What is Reducing Cover?.
The life cover you have chosen at the beginning of the policy term is reducing from the second month which will normally equivalent to the Outstanding principal of the loan amount in most cases. Here the coverage is reducing every month and becomes zero at the end of the tenure as your outstanding principal will be zero at the end of the last instalment you pay.
CONCLUSION
Please verify the difference in premiums for fixed and reducing cover. In case of fixed cover the balance money after knocking the outstanding principal and any other charges will be paid to your family and in case of reducing cover the same will not be applicable as the coverage reduces and mostly equivalent to your outstanding principal .Your family might not get any additional money but the loan will be covered provided the instalments have been paid till the occurrence of the unfortunate event. Please choose the ideal plan suitable to you after evaluating the above options.