Loan Cancellation Planning
Proper loan cancellation insurance can help you meet your financial commitments should you become terminally ill, disabled or suffer a medical trauma.Normally, the sum assured decreases when your loan amount decreases.
The insurance policy is scheduled to decrease as you pay off your loan, be it personal loan or business loan. There are some savings in terms of the total costs because the costs to provide the insurance benefit decrease every year with a steadily decreasing benefit.
If you take out another credit facility or refinance your home, the insurance policy won’t adjust for the new business loan amount or mortgage.
Make sure that you will only be carrying one mortgage on your home and that you won’t need to refinance your home. Also, make sure that you don’t need additional insurance benefit for other financial obligations. Otherwise, a level insurance benefit policy could be more suitable to insure other financial obligations once your initial business loan or mortgage is paid off and you won’t need to purchase another life insurance policy at an elder age.