Credit insurance – operating method
The subject of insurance in loans to individual customers is a subject that has changed a lot over the last few years. The reason for these changes are both product changes in financial institutions and changes in the legal environment in which these institutions operate.
Several questions arise: can the bank demand credit insurance from me? Do I have to buy them in a bank or can I use the services of a selected insurance company directly? Can a bank condition the granting of a loan on the choice of insurance option?
Can a bank demand credit insurance from me?
This issue was regulated by a legal change introducing the institution of an information form issued for each individual customer loan. The information form is a document summarizing the terms of the contract, presenting them in a simple and transparent way. In the following tables of the information form you will find information about additional services (including insurance) and information whether it is required to use these services. In the vast majority of institutions you will find the word “no” there.
Banks simply do not demand credit insurance for customers, but they tempt customers with the possibility of using insurance by offering additional profits for it. The obvious advantage of insurance received with a loan is the protection of life and health, as well as the protection of relatives in the event of “final” events.
Insurance is also associated with a package of additional benefits
Often, insurance is also associated with a package of additional benefits that facilitate everyday life, i.e. assistance packages that facilitate crisis situations, e.g. the need for professional help or the intervention of a specialist doctor. We get it all as part of a package that costs from a few to several dozen zlotys a month.
Before you buy insurance, think about whether it is better to create a financial security buffer on your own.
If the bank also has the option of selling insurance as part of the loan offered, you will certainly learn this from your advisor. A professional credit advisor is obliged to inform his client about insurance options and to obtain confirmation during the sales conversation that it is a product that meets the client’s needs. The vast majority of banks on the Polish market have loan insurance options.
Can I use the services of an insurance company?
For customers who prefer to use the alternative option, it is also possible to present a personally purchased insurance policy to secure the loan they are applying for. How does it look in practice? The customer should find an insurance company that offers the policy to the same extent as the bank would offer it and for the amount corresponding to the loan amount.
However, looking at the market experience, finding such a policy is a tedious process, but not impossible. However, it should be remembered that if at least one element of our policy does not comply with the requirements, the bank may reject this policy.