What Happens To The Loan When Life Changes

Loan 2023

Illness, unemployment and death are events that can affect your or your family’s finances. With loan protection insurance, it becomes easier to tackle tough periods in life.

If you become ill or unemployed, it can be difficult to get your finances together. Therefore, make sure to be insured so that you can feel safe no matter what happens. With collector’s loan protection insurance, you are entitled to compensation in the event of illness or unemployment. It also protects your relatives in the event of your death.

When you take out a loan with collector bank, you are automatically connected to loan protection insurance. The insurance is free for the first three months and replaces your monthly cost if you end up in a situation where you cannot pay for your loan. After the first quarter, the insurance continues to run, unless you choose to terminate it yourself.

What applies in the event of illness and unemployment?

In order to receive compensation in case of illness, you must meet a work requirement, which means that you must have been fully able to work and permanently employed for at least 30 consecutive days before the first day of illness. If you become unemployed, you must have been able to work and permanently employed for at least 180 days before, for the insurance to apply.

You must also have a decision from the unemployment fund certifying that you are entitled to compensation. Keep in mind that there is a waiting period, during which no compensation is paid, and that you must meet certain requirements to be entitled to compensation should you become ill or unemployed again. It can also be good to know that the grace period starts again, in case you change banks or combine several loans.

What applies in the event of death?

It is not possible to inherit a debt. On the other hand, the estate inherits any debts, which means that these must be paid with assets from the estate during the probate. If there are not enough assets in the estate, there is a ranking order for which debts should be prioritized. Home loans and funeral and probate costs have high priority, and then creditors are paid in proportion to the size of the debt.

With collector bank’s loan protection insurance, your relatives are protected in the event of your death. This means that the insurance pays out the remaining amount of the loan debt with collector bank.

It may be good to know that abroad are not covered by inheritance law, but by the laws that exist in the country where they live. In some countries, debts are inherited, which means that heirs inherit debts from people living abroad. Therefore, be sure to check which rules apply in the country in question.

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