Banks in the load impose life insurance for car loans. Now we will consider whether life insurance for a car loan is mandatory and whether it is possible to refuse it.
Car prices are rising, the material situation of the population does not change, but there are no less cars on the roads. On the contrary, there is a tendency to increase the number of cars per capita.
The reason for this growth lies in the availability of car loans. With the help of the so-called “leverage”, many were able to buy a car. But banks impose life insurance with a car loan. Now we will consider whether life insurance for a car loan is mandatory and whether it is possible to refuse it.
Why get life insurance when buying a car?
Life insurance for a car loan is not accidentally imposed, the car is a source of increased danger and anything can happen on the road with the driver, that’s why the bank tries to protect itself with the help of insurance and provide a 100% guarantee for the return of the car loan.
Without insurance, in the event of an accident, credit obligations will be transferred to close relatives and they will have to repay the debt.
If you have insurance, then all the costs of repaying a car loan will be borne by the insurance company.
Based on this, I think this has a reasonable grain. As they say from the sum, do not renounce.
What are the benefits of car loan life insurance
Oddly enough, but car loan life insurance is beneficial to all parties. And the insurance company, and the bank, and the client.
Let’s look at the benefits for each side in more detail.
Benefit for the customer. It turns out there is a benefit, and here’s what:
- Lower percentage. If you insure life, then the bank gives you a loan at a lower interest.
- In the event of an accident, the insurance company will repay the loan.
The benefits of the bank.
- Increasing the amount of the loan by including in it the amount of the insurance policy.
- Loan repayment guarantee.
- The percentage of the insurance company for insurance.
Benefit of an insurance company.
- Earning income in the form of an insurance premium. The size of the insurance premium depends on the size of the car loan.
- Savings on staff remuneration. All documents are executed by bank employees.
The conditions under which life insurance is issued upon receipt of a car loan
No matter how we resist, car life insurance becomes mandatory.
Even the government’s decree on the optional life insurance when issuing a loan could not turn the tide.
Banks impose insurance on everyone and everyone. It is understandable, insurance is a guarantee of repayment of the loan.
To increase the volume of car loans with life insurance, banks offer customers a lower percentage and assure that the insurance company will be liable for late payments. Who does not agree with such conditions ?.
And yet, if you decide to use life insurance, you should pay attention to the fact that the size of insurance covers the amount of the car loan.
Moreover, the amount of the insurance premium will not exceed 0.1% of the cost of the loan. I think it’s worth agreeing. Moreover, you will have time to refuse insurance.
How to opt out of life insurance
Car loan life insurance is an imposed service!
You can not issue it at all or refuse it after the conclusion of the contract.
Bank employees imposing this service are motivated by the fact that otherwise, the loan will be issued at an increased interest rate or you will generally be denied a loan.
Remember that if you refuse life insurance at the stage of choosing a loan product, then you will change the interest rate and it may be several points higher.
Or even refuse to issue a loan.
But let’s be patient and we will not take a loan at a higher rate. And if you do not need insurance, you simply refuse it.
In order to refuse life insurance for a car loan, you need to bring an application for termination to the bank. The period in which you can terminate the insurance contract is prescribed in the main contract and ranges from 3 to 6 months.
There are times when the bank refuses to accept your application. Then we do this, go to the post office and send the application to the bank address by registered mail with a return notification. And the bank will not go anywhere, terminate the contract.
But if this does not help, then we go to court. That’s how lucky you are. Judicial practice is ambiguous.
Car loan life insurance will be refunded in 2 cases:
- if you agree with the bank;
- if you won the case in court.
But even if everything worked out for you and the decision was made in your favor, you will not receive the whole amount in your hands, the agent fee will be kept from it.
If you repaid your loan ahead of schedule, you can also return insurance. Of course, they will not return the full amount to you, but in proportion to the elapsed period and minus the commission paid by the insurance company to the bank. In this case, you need to contact the insurance company.
I think you should have no doubt about the question: do I need life insurance for car loans? The main thing at a car dealership or a bank is to carefully read the contract and make an informed decision, because an insurance policy can also serve a good service.