Risks can come anytime. That’s why your credit or bank loan is always included insurance. However, how important is this insurance? Credit guarantee assurance is basically a combined form of credit insurance and credit guarantee that covers the debtor’s inability to pay off the remaining loan to the creditor as a result of the risk of death and default from the creditor. The insurance mechanism runs when the debtor dies, while the guarantee will play a role in the event of a death claim. Basically, the credit provided by banks, both state and private banks, is inseparable from credit risk. Therefore, any loan or credit given by a bank or institution such as Licensed Money Lender is always included because we do not know when the risk will arrive.
Like most insurers, this credit insurance also has a premium. However, there are some banks that offer this type of insurance without any premium. The amount of the premium usually varies from bank to bank and depends on the age of a person taking a loan: Premiums are usually higher for someone older or near to retirement. Loan Amount: If the loan amount is high, the premium payment will also be higher because the bank also has a higher liability on this matter. The length of loan: If the payment period is longer, the premium to be paid is also higher. Insurance associated with the banking world is more focused on credit insurance which is the field of general insurance for protection given by the insurer to commercial banks / financial finance institutions on the risk of failure of the debtor in paying off the credit facility or cash loan Such as working capital loans, trade credits and others provided by commercial banks / financial institutions.
Credit insurance is closely related to banking services, especially in the field of credit that is always associated with credit guarantees in the form of moving goods and immovable goods that may be hit at risk that may cause losses to the owners of goods and banks as lenders. Credit insurance aims to protect the lender from the possibility of non-refundable credit given to its customers. Assisting the activities, guidance, and security of credit in banking and other credit outside banks.