Credit insurance is a crucial business element that will stand in for you in case you are not in a position to pay back your loans, whether disabled, unemployed or dead. Credit insurance is quite costly but can save you for further financial turmoil.
It protects you from missed payments on a loan if you are unemployed or disabled. It is prudent to weigh your options carefully before picking up this coverage.
How it Works
Credit insurance clears your loan payments if you are not in a position to. It works for both individuals and businesses. Your lender may recommend and offer credit insurance when taking a new loan facility. The policy is, however, taken at will.
How Credit Insurance Cover Helps
Aids business growth. Credit insurance is an integral part of assessing credit risk appetite to grow your existing customers. Identifying new markets is much easier when working with an underwriter front.
With a credit insurance cover, businesses have better lending rates. Lenders are much confident you will ultimately pay your dues regardless. It automatically increases your loan limits while providing better security terms.
Credit management associated costs decrease. Credit insurance puts you in a better position to enhance business profitability. Instead of focusing on bad debts, it allows you to grow on business.
Questions to ask before taking a Credit Insurance Cover
• What is the premium paid?
• Is the premium part of the loan, or its paid separately?
• What is covered and what is not?
• What is the waiting period before the policy is activated?
• If you cancel the policy, can you get refunds?
• What is the difference between the loan instalments amount and credit insurance premiums? Is it worth it?
If you are subscribed to a life or disability insurance cover, there is no point in taking credit insurance. Make a critical decision since it is an optional policy. Credit insurance could make your loan unaffordable since it mainly offers low credit limit customers. Credit insurance, however, offers you great peace of mind in the event you are not around to support your family.