Loan payment protection

Risk for borrower

Any loan taken by you will represent a risk in terms of repayment for you as well as your family because this is a liability that has to be repaid to the lender.

Shift of onus

The major risk is that if anything happens to the borrower then the family might be saddled with a loan they might find difficult to repay under the changed circumstances.

Protection

There is adequate protection available in such a situation in the form of an insurance policy that will provide cover for the exact amount of the loan outstanding.

Premium payment

Since this is an insurance cover there will be a premium that has to be paid for the purpose of getting the cover. This represents an additional expense for you as a borrower.

Reducing amount

The insurance cover and premium under this plan will go on reducing along with the repayment of the overall loan because this is meant to cover for the repayment of the loan. This ensures that there is no extra cover taken by you in the process.