What is Risk Insurance or Loan Protection?
Risk insurance is an insurance to protect you and your family, should something unfortunate happen to you that means you’re unable to make repayments on your loan.
It’s similar to life insurance but typically covers items such as:
- Income protection
- Loan protection and insurance
- Total Disability Insurance
- Trauma or critical illness insurance
Basically, risk insurance or loan protection is there in case of serious injury, illness, or unforeseen, unfortunate circumstances. It’ll help you keep up to date on loan repayments and avoid losing your home in a time of hardship.
How does Risk Insurance work?
Essentially, in the case that you find yourself unable to repay your loan you might make a claim on your risk insurance or loan protection. Reasons you may be unable to make repayments on your loan are illness, disability, or other unique circumstances. Risk insurance and loan protection can cover home loans, car loans, and personal loans.
Typically, your risk insurance or loan protection will cover payments up to a predetermined amount. In the case that you find yourself unable to make repayments, you’re able to initiate a claim on your risk insurance or loan protection, and then secure those monthly payments. These loans typically have a shorter term with coverage being offered on average, somewhere between 12 and 24 months. Your coverage may also include a death benefit.
Why should you get Risk Insurance & Loan Protection?
Risk insurance and loan protection both offer security, stability, and a safety net to you and your family. Unfortunately, life doesn’t always go to plan. If you’re out of work, sick, or injured, you’ll find making repayments on your mortgage is just another thing to worry about, not to mention losing your home. Loan protection offers you the security in case of the worst.
