How are you benefited from different types of financial insurance?
As the name suggests, financial insurance comes to your help when your finances are not in the right order. It may happen that you experience a sudden job loss or a temporary disability. These are the times when a financial insurance can cover your monthly loan payments or provides you with a percent of your salary so that you can meet your daily expenses. Read through this article to know about different types of financial insurance policies that you can purchase according to your need.
Types of financial insurance
4 types of financial insurance policies are discussed in the following lines.
1. Credit insurance
Credit card insurance is one of the popular types of personal credit insurance policies. It takes care of your credit card balance in the event of your physical disability, when you’re unable to work. It may also happen that you suddenly become unemployed. In these situations, credit card insurance covers your monthly credit card payments. Moreover, if the debtor dies or become permanently disabled, then this insurance policy pays off the entire outstanding amount due on the credit cards.
2. Loan protection insurance
Loan protection insurance covers your loan repayments if you become unemployed or in the event of the borrower’s death. It will also provide you with the coverage if you’re not able to work due to any illness or injury. Therefore, loan protection insurance also helps you to maintain a good credit score as your monthly installments are paid by the insurance company on time. You can purchase this financial insurance policy (loan protection insurance policy) to cover your secured as well as unsecured debts.
3. Mortgage insurance
Mortgage insurance can be broadly divided into 2 types – private mortgage insurance and mortgage protection insurance. However, both these insurance policies protect the lender against loss when the borrower defaults on loan repayment. You may require private mortgage insurance when you’re not able to make at least 20% down payment on your home loan. Mortgage protection insurance covers your monthly home loan installments if you’re unable to make your monthly mortgage payments because of your illness, injury or sudden unemployment. It is also referred to as mortgage payment protection insurance and it can be divided into mortgage disability insurance, mortgage life insurance and mortgage unemployment insurance.
4. Income protection insurance
Income protection insurance offers you a certain percent (usually 40-60% depending upon your policy) of your monthly salary if you become unemployed for a temporary period. It may be of more importance to you if your family members are dependent on your income or you’re self employed. Thus, apart from helping you to make monthly loan installments on time, this insurance policy also helps you to take care of your everyday financial needs.
You will find that some of the above discussed policies have overlapping insurance coverage. Therefore, it is advisable that you take help of an insurance agent before purchasing any financial insurance policy. An agent can assess your financial conditions and suggest you which insurance policy/policies can provide you with the sufficient coverage as per your need.
Useful Resource :
Insurance Companies Reviews – Read News and Reviews from Insurance Industry, Insurance Commercial & much more.