Does credit insurance make sense?
When we decide to take a loan, we take some risks. We can never be sure whether in five, seven or ten months we will be in the same financial situation as when we decide to take a loan. As for the loan with a small repayment period, we do not have as many unknowns as for large loans spread over several, often several or several dozen years.
To minimize the risk, banks offer credit insurance. Sometimes such insurance is compulsory, but in most cases we can choose it voluntarily. This is not a particularly cheap option, but in exchange for buying it, the interest rate or commission charged by the bank is often reduced for starting the loan. What does the situation really look like, is such insurance profitable?
On the one hand, credit insurance gives us a sense of peace, but it is really a security for the bank, which from the moment of its purchase does not have to worry about their money, which will be given away anyway.
The matter by whom comes to the background. Such insurance covers the risk of losing your job, health or our death. The advantage is that if the bank requires some kind of security, then insurance is enough for it. We can forget about the tedious and most often fruitless search for Jews.
What decision to make?
If insurance is compulsory, we can smile in our thoughts because we have just been released from making a really difficult decision. If it is voluntary, then we should think carefully about its issues. Buying insurance is often promoted by lowering the interest rate or leaving the commission.
We should calculate its cost and compare it with what the bank offers us, because very often it turns out that instead of the promotion we have almost the same rate (including insurance) or even higher. What insurance can give us is peace of mind, but to feel it fully, we should choose a good offer. Let’s always read the GTC (General Terms and Conditions of Insurance) and give it some time to think. This is an important decision and must be taken with full responsibility.