Benefits Of Credit Insurancef
Credit insurance is form of insurance under which the individuals and businesses are covered. It provides a protection to the policy holder against the failure to pay the credit debts. Credit insurance is a very important tool during the times of credit risk as it provides protection against the incident mentioned in the credit insurance policy. The incidents may include loss of job, bankruptcy, death or accident of the policy holder.
The best part of a credit insurance policy is that it maintains the good credit rating even in the times of financial hardship. The credit card bills of the policy holder are paid off if the insured person is not able to work because of an injury or job loss. The premiums are paid on monthly basis in this type of insurance.
Credit insurance is also beneficial to the companies whether big or small a great deal. It provides them financial assistance during the time of overdue payments if they are into exports or imports. If any import or export orders have been cancelled, then the credit insurance comes to the rescue of these companies to compensate the losses suffered. The insurance also covers certain risks associated with the business organizations such as insolvency, transfer of assets, non-payment of bills, war and unforeseen natural events.
There are many financial institutions that provide that provide credit insurance policy. However, the major credit insurance providers are The New India Assurance, Citi bank credit card and ICICI Lombard.
Types of credit insurance
There are many types of credit insurance, which are as follows:
Credit property insurance: In this type of insurance, the payment of any purchased item is made if in case it is destroyed or stolen.
Credit disability insurance: If in case an individual losses a job or is not able to work because of an accident, then the minimum amount due on the credit card is paid for some months by the insurance company.
Credit life insurance: In this type of insurance, the insurance company pays the amount due on the credit card in case of death of the policy holder.
Credit involuntary unemployment insurance: The insurance company pays the minimum amount that is due on the account if in case the individual has lost the job or has been laid off for the specific period of time.
There are various things that you must keep in mind before taking a best credit insurance policy. You must have knowledge about the type of credit, loan amount, premium that is required to be paid each month, and the type of policy you require. After ascertaining all these factors, take the credit insurance policy to get an easier access to finance.
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