Why do I need loan insurance for a loan at a bank? – Financial & Insurance News

Why do I need loan insurance for a loan at a bank?

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Borrower’s accident insurance refers to the borrower’s death or incapacity (or part of it) due to an accident during the loan contract with the bank, the insurer will pay out according to the insurance contract, generally the amount of coverage for the principal and interest of the loan, the first beneficiary is the loan bank, the second beneficiary is the person contained in the insurance policy, the payout ratio, payout conditions are similar to different insurance companies, interested children’s shoes You can read the insurance contract carefully when buying or Baidu. If it is the insurance, the main purpose is the following: 1, risk diversification, increase risk resistance. The request to buy this insurance is generally personal business loans or consumer loans are mostly, especially credit business loans. Based on the business characteristics of small and micro enterprises, business conditions and the main operator is closely linked, if the operator because of an accident (such as car accidents, fire and other unexpected events) resulting in death or incapacity (including part), then the business will be in trouble resulting in bank borrowing can not be returned on time, even if the borrower’s family can successfully get through the difficulties, but there is a certain period of time in the transition period, the bank’s assessment mechanism Unable to accept a long period of overdue loans with uncertain return time. The purchase of this insurance is beneficial to the borrower to increase the risk capacity, the bank can timely deal with unexpected events caused by the overdue loans to complete the assessment index, and for the borrower, in the event of unexpected events caused by the ability to repay the decline of the insurance to pay off the family can avoid the huge impact of unexpected events on the economy, is the insurance company, the borrower, the bank three win protection measures. Consumer loans to buy the insurance is the same purpose. 2, increase in revenue: banks selling insurance products generally insurance companies will give a share of profits, this is not difficult to understand. As for other bank agents selling silver cabinet insurance, generally based on the financial function plus protection function, not allowed to force the sale of. There is also a type of insurance for performance liability insurance, also known as performance guarantee insurance, refers to the insurance company to the beneficiary of the performance guarantee insurance (i.e. the investor) commitment, if the policyholder (i.e. the debtor, here refers exclusively to the borrower) does not perform its obligations in accordance with the contract or the provisions of the law, the insurance company to assume liability for a form of insurance.