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Credit Life
Credit Life Cover serving as collateral for your loan
This cover includes
Death cover, which pays off the remaining loan balance Permanent disability cover, which pays off the remaining loan balance Temporary disability cover, which pays the loan instalments for up to 12 months or until the end of the loan term, or until the policyholder recovers Retrenchment cover, which pays the loan instalments for up to 12 months or until the end of the loan term, or until the policyholder finds new employment. This benefit is not applicable if the policyholder is self-employed.
How Credit Life Insurance Works
Premiums
Borrowers pay a monthly premium for their credit life insurance policy, providing financial protection in unexpected circumstances like disability, critical illness, or death.
Payouts
In the event of the borrowers's death, disability, or retrenchment, the insurance company will pay out a lump sum to the lender, which will be used to pay off the outstanding debt.
Benefits
Credit life insurance may include benefits for disability or retrenchment, which means that the borrower may be able to claim on the policy if they are unable to work or lose their job.
Benefits of Having an
Mont Blanc Financial Services (MBFS) Financial Advisor:
01
Comprehensive Approach:
MBFS advisors go beyond basic financial products. They take a holistic view of your situation, considering short-term insurance, employee benefits, risk management, and even investment options. This comprehensive approach ensures your financial plan addresses all your needs.
02
Technology & Innovation:
MBFS prides itself on being a "Fresh-Tech" ™ company. Your advisor will leverage modern tools and resources to deliver efficient service and provide you with up-to-date financial information.
03
Client-Centric Focus:
Rooted in their core value "We Care" ™ , MBFS advisors prioritise building strong relationships with our clients. They act as partners, understanding your unique goals and tailoring solutions to achieve them.
04
Peace of Mind & Security:
With MBFS's focus on "Getting You Claims Ready"™ , our advisors can ensure you have the right insurance coverage in place. This proactive approach can give you peace of mind knowing you're protected financially in case of unforeseen events.
What are the benefits for you?
Constant cover
The insurance amount stays the same throughout the policy term, ensuring full loan repayment cover regardless of the decreasing loan balance. This predictability guarantees that the borrower's debt will be covered fully at any point during the loan term.
Convertible cover
After the loan is repaid, the policy can transition into a whole-life cover without additional health checks. This feature provides ongoing life insurance benefits, extending the policy's value beyond debt repayment.
Beneficiary Benefits
If the insurance payout exceeds the loan balance, the surplus is passed to a designated beneficiary. This allows the policy to not only secure debt repayment but also to support the borrower's family financially after their passing.
Simplified Enrollment
Designed for simplicity, these policies are easy to understand and apply for, often integrated into the loan process. This streamlined approach makes securing cover convenient, encouraging wider use and understanding.
Difference Between Credit Life Insurance
and Life Insurance
Credit Life Insurance
Purpose
To cover outstanding debt in the event of the borrower's death, disability, or retrenchment
Cover
Typically limited to the outstanding debt amount
Cost
Premiums are typically lower than Life Insurance premiums, but are more limited.
Life Insurance
Purpose
To provide financial protection to the policyholder's beneficiaries in the event of their death.
Cover
Cover can be much broader.
Cost
Premiums are typically higher than Credit Life Insurance premiums, but are more broader
Frequently Asked Questions
What is Credit Life Insurance, and how does it work?
Credit Life insurance is a type of insurance that pays off your outstanding debt (like a loan or credit card balance) in the event of your death. This can help your loved ones avoid the burden of paying off your debt while grieving your loss.
What types of debts are typically covered by Credit Life Insurance?
This can vary depending on the insurance company and policy specifics, but commonly covered debts include mortgages, car loans, personal loans, and certain credit card balances.
Are there any situations where Credit Life Insurance wouldn't pay out?
Yes, there could be exclusions in the policy, such as death due to suicide within a specific timeframe after policy inception, pre-existing conditions not disclosed during application, or participation in illegal activities leading to death. It's crucial to carefully read and understand your policy's exclusions.
Is Credit Life Insurance mandatory, and are there alternatives to consider?
No, Credit Life Insurance is not mandatory. You can decline the option offered by the lender when taking out a loan. Explore alternative ways to manage potential debt like disability insurance or having a life insurance policy with enough cover to pay off existing debts in case of unforeseen circumstances.
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