Payment protection insurance - is it worth it?

The payment protection insurance, also called installment protection or credit protection insurance can be taken out as protection for a loan through online payday loans california. The residual debt insurance guarantees that the outstanding loan amount will be paid off in the event of death, but also in the event of unemployment or disability.

In many cases it is not worth making use of this additional option. The payment insurance is not included in the effective interest rate and makes your loan more expensive.

When does the residual debt insurance pay?

Many borrowers wonder when residual debt insurance will be paid out. The scope of benefits depends on the provider with whom you take out the insurance.

In most cases, however, the installment protection applies in the following situations:

• Death of the borrower
• Unemployment
• Incapacity for work
• Illness

Would you like to take out payday loans california, it is advisable to exact least on the scope of insurance before signing the Financial information.

How does residual debt insurance affect the loan?

The residual debt insurance is an optional service that borrowers do not have to use! With some banks, it may happen that they only grant a loan if you decide to take out insurance. This usually applies to people with a bad credit rating and in this case, the installment protection must be included in the effective interest rate.

As a rule, the residual debt insurance is not included in the effective interest rate - this makes it difficult for the consumer to get an overview of how much the loan actually costs. In many cases, the interest rate can double.

In many cases there are more costs than benefits, which means that residual debt insurance is usually not useful.

Advantages and disadvantages of residual debt insurance:

• Insurance against illness, unemployment, death
• Can be useful with high loan amounts
• Facilitates access to credit
• Without a health check

Disadvantage:

• Increases the cost of borrowing
• Cheaper alternatives possible
• Exclusion criteria and waiting times
• Inflexible and often unnecessary

Alternatives to residual debt insurance:

Term life insurance is a sensible and inexpensive alternative to residual debt insurance offer by The Pay Day King. This payday loans no credit check california is used to protect your surviving dependents in the event of death.

With term life insurance, a fixed sum is agreed that is paid out in the event of death. The advantage of term life insurance is that it can be paid in installments - the residual debt insurance, on the other hand, is paid "in one fell swoop".

Does residual debt insurance make sense?

Ultimately, it can be said that residual debt insurance does not make sense in most cases. It is offered to you by banks under the pretext of protecting yourself and your relatives in the event of illness or death - in most cases, however, only the bank benefits, the consumer not.

The best online payday loans are usually not included in the effective interest rate and can double the cost of a loan. Consumer advice centers recommend taking out term life or occupational disability insurance instead.

For more info Click thepaydayking.