In case you are acquiring a mortgage, you are obliged to cover your bank loan with insurance. At the same time you can also acquire other insurance products to protect yourself against various life situations that can occur and you could lose ability to repay the loan. Do you know what kinds of insurance are possible to acquire together with mortgage?
Bank loan insurance as a must
In the past it used to be quite usual that the recipient of the loan died. In that case his inheritors had to take over the loan not to lose the place to live in. Nowadays this problem is solved by loan insurance in case of death.
Recipient of the loan acquires this insurance together with the mortgage loan. In case of death the rest of the loan is repaid from the insurance. Inheritors are not obliged to repay the debt. The property already comes to the heritage cleaned off the mortgage. This insurance can be also combined with capital insurance, from which the insured can obtain financial benefits.
Insurance of ability to repay
This insurance is completely voluntary part of mortgage installments. Banks offer this insurance together with an insuring company. Although this insurance cannot be found in the general offer of all banks. It is important to mention that with the insurance the installments can go much higher.
Usually it is about one tenth of monthly installment, from hundreds to thousands of CZK. Therefore it is important to carefully consider whether it is necessary to pay the higher price or to save certain amount of money for the case of need.
The insurance covers loss of job or long-term illness
Individual conditions of this insurance differ from the individual company providing the insurance. In most cases this insurance covers situations when one is ill in the long term thus with smaller income. It also covers situations when one loses job or becomes invalid.
The mere fact of becoming ill or losing job is not enough for the insurance company to take over the installments. The companies specify other more precise conditions, e.g. one has to work for at least one year before losing the job or to be on sick leave for specific amount of time.
