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CREDIT LIFE ASSURANCE
It will protect the life of a person who has borrowed from a bank. In other words, in the untimely death of a loan beneficiary, Provident Life Assurance Company will pay off the remaining amount on the loan thus freeing the deceased’s family from the ‘claws’ of the bank.
Many people cannot make major purchases without a loan
Credit insurance is sold to consumers as part of a purchase where money is borrowed to finance the purchase.
Credit Life Assurance protects a lender against the risk of credit default due to the borrower dying, becoming disabled or unemployed
It also protects the estate of the deceased against outstanding debt on death
The insurance pays the lender, not the consumer, in the event of a loss
The Market:
Financial Institutions:
Banks
Building societies
Loan companies
Retail Merchants
Auto dealers
Furniture retailers
Benefits
It will provide the bereaved family peace of mind in the sense that they will be freed from any possible harassment from the bank should they fail to pay the remaining amount of the loan; and
It will save the deceased’s family from falling into debt as a result of the unexpected financial burden generated by the death of the borrower.
It cushions the financial risk of the banks, thus increasing the financial confidence of the banks. This allows the banks to increase lending to borrowers. Furthermore, it gives the banks good public image.
The cover is against Death and Permanent Disability:
Definitions
Death Benefit
An amount equal to but not exceeding the balance of the indebtedness as herein defined.
Total and
In the event of the total and permanent disablement of the life assured
Permanent
occurring prior to the attainment of age 60 and before the expiry of the
Disability
term of the credit agreement an amount equal to the death benefit shall be payable by the Provident Insurance Co. Ltd.
Temporary
If, before the policy anniversary preceding the life assured’s 60th birthday
Total
and the expiry of the term of this policy, the life assured is prevented, as a
Disability
result of illness or bodily injury, from earning his normal income following any occupation for which the individual is suited, taking education, training and experience into consideration, the Provident Life Assurance Co. Ltd. shall pay, after the deferment of 30 days, the monthly installment agreed upon under the credit agreement referred to in the proposal schedule.
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