When we borrow, we are confident that we will be able to pay the installments for the last month without any problems. The success of a payment depends on our financial security, which can be shaken by many things.
You should also be prepared for what happens if you fail to do so .
For a home loan, which requires a long-term and relatively large down payment, it is especially important to be financially stable to the last detail. A personal loan that we take out for a vacation, for example, is repaid in one year, but a home loan can be repaid for up to 34 years .
Cases we don’t want to go through
Typically, we will not be able to repay your home loan details in the following cases:
- If we get sick pay for a longer period of time.
- If we become unemployed.
- If we get permanently crushed or die.
To counteract the consequences of these, financial institutions offer a solution that can be accompanied by a loan repayment insurance . This insurance pays if we are unable to meet our obligation to the bank for any of the three reasons listed above. The insurances may be different, not all of them will cover every case, and they will generally agree to pay the remaining installment in case of disability and death.
Before we automatically accept the solution offered by your bank for a home loan, it is worth thinking about what the costs are and what the terms are.
In the event of cancellation, we must pay the installment
For example, the “anti-unemployment” construction only comes in the event of a job loss other than self-incrimination and includes many other restrictions. For example, if we have just started paying off a loan and are already kicked out, we will not have the money. We must have a job for at least half a year during the repayment period to protect us from the unpleasant consequences of the dismissal.
In addition, although people now typically work between the ages of 65 and 70 and even longer, this type of insurance can only be concluded until the age of 55. Let’s not forget that you only pay for a few months and the amount that insurance helps us during the unemployment period is maximized.
It is also worthwhile to look at the conditions of death. There are offers that only pay in the event of an accident. By doing so, the bank virtually prevents the vast majority of deaths.
Let’s also look at “independent” offers
Alternatively, we can take out another type of insurance that is more favorable to us, independently of the loan repayment insurance, regardless of the bank.
In other cases, such as home savings plans and home loan offers, we have sometimes found it worthwhile to choose a product that is not “attached”. For example, if you take out a life risk insurance, it pays for every kind of death.