Think about the common risks that may impact your well-being and your assets such as:
- Your health
- Personal Safety
- Ability to work
- Financial Stability
Are you and your family financially prepared in case of :
- Premature death?
- Accidents and diseases?
- Disability or physical handicap?
- Old age with no economic resources?
Insurance helps protect you and your family financially against unplanned events. When purchasing insurance you may choose between creditor insurance and non-creditor insurance.
What is Creditor Insurance?
Creditor Insurance is an insurance group policy which pays off an outstanding credit balance of a loan (e.g. credit card balance) in the occurrence of an insured event (e.g. if the insured person dies or becomes disabled).
The question we should all ask is what happens if all of a sudden you are unable to repay a loan or mortgage due to a health crisis or death? What would happen to your family if you pass away? What would happen to you and your family if you become disabled?
Credit Life Protection is a death benefit. If you die while still repaying an insured debt (such as a mortgage or personal loan), the insurance policy ensures that your debt will be paid off in full – leaving your loved ones free from your debt.
Health Protection is a living benefit. You should not only be concerned about death – what happens if you survive a health crisis? Health protection ensures that your loan or mortgage will be settled in full in the event that you are diagnosed with a defined critical illness (e.g. cancer) or you become permanently disabled and you are unable to work. Yes, that means your home could be paid off in full if your mortgage is insured.
What are the main benefits of “living benefit” insurance such as Health Protection for you?
When “living benefit” creditor insurance is in place to pay off debts, then regular health and/or disability insurance can be used for the purpose for which it was intended: day to day living expenses and medical bills!
Basic Insurance Terms:
Creditor Insurance: Insurance group policy that pays off an outstanding credit balance of a loan e.g. credit card balance or a mortgage, in the occurrence of an insured event, e.g. the insured person gets disabled.
Non-creditor insurance: Insurance policy not associated with any lending product
Group Policy: Insurance policy owned by an organization with enrolment only open to members of that organization e.g. customers or employees of an organization and professional association groups.
Applicant: The person or entity that applies for an insurance policy.
Policy holder/owner: The person or entity that owns the issued policy.
Life Insured: The person whose life or health the policy insures.
Beneficiary: Person named to receive the benefits of an insurance policy.
Premium: Payment or payments made by the policy owner to obtain a certain amount of insurance coverage.
Risk: Probability of occurrence of uncertain or random events that could result in consequences such as damage, loss, adverse health or even death.
Limitations and Exclusions: Contractually stipulated circumstances when an insurer will not pay the insurance proceeds following the occurrence of an event.
Single Coverage Life Insurance: Insures the life of one person only and pays out the amount insured if the person dies during the term of the policy.
Joint Coverage Life Insurance: Insures two lives, usually on a “first to die” basis, with the insured amount paid out to the survivor after the first person dies, after which the policy terminates.