What happens to your loan if you die? Consumers regularly ask themselves this. Logical, because you do not want to leave your relatives with a loan that you have taken out. On this page you will find more relevant information about borrowing money and dying. We will focus in particular on the possibilities to cover (insure) you against the financial consequences of death in relation to the loan. If you have any questions regarding this, please do not hesitate to contact us.
Remission in the event of death
Upon the death of the contractor (s), the lender will recover the outstanding loan from the surviving relatives. When the surviving relatives accept the legacy, the surviving relatives must realize that they must also meet this obligation.
It is often possible to take out insurance with a loan that insures the loan in the event of death. This insurance is called a remission in the event of death. In the event of death, the insurance company pays an amount that is equal to the outstanding amount at the time of death, so the remaining debt will be paid. Suppose you have taken out a loan of $ 20,000 and at the time of death there is still $ 15,000 outstanding, then $ 15,000 will be waived.
In Good Finance Financing is possible to insure your loan in case of death, which can be closed for only the first or 2nd contractor, or for both contractors. You pay a net premium for this insurance that is calculated for you, this premium depends on the size of the loan and your age. Good Finance will charge a one-off charge of $ 89 for the insurance mediation. You can find more information about this insurance here.
It is not mandatory to take out insurance with your loan, you decide this yourself! In summary, the total costs consist of two components: a one-off $ 89 mediation fee and then a monthly premium that is calculated at the time you make the (quotation) request.
Standard cancellation in the event of death in the loan
With some lenders the loan is automatically insured in the event of death, this is often limited to a maximum amount. The costs for this insurance are then ‘packaged’ in the interest, which means that the interest is higher than with a lender who has no standard cancellation in the event of death in the loan.
Maximum age insurance in the event of death
With Good Finance it is possible to take out death insurance up to the age of 60, this is not possible above that.
Insurance not possible
In certain cases it is not possible to take out insurance through us. If this is not possible to take out death insurance with your loan, you can always ask insurance companies yourself whether it is possible to take out a separate term life insurance policy. This individual term life insurance policy pays out a sum of money in the event of death that you have agreed with the insurer in advance, so this amount is not linked to the remaining loan amount that you still owe to the lender.