Credit Default
Credit Default insurance is offered to banks to protect them against defaulting loan takers. In spite of all the precautionary measurements and guarantees that the banks have, there are some risks due to:
1. The death of the borrower during the loan’s duration due to natural causes or an accident.
2. Total disability to perform work and make a living due to an accident or a disease.
3. Inability to settle the loan for a certain period of time due to a partial disability or loss of employment due to dismissal or redundancy.
Bank loan insurance covers the risks, so the banks do not have to pursue the guarantors.
The following are the benefits afforded by this insurance:
• In the case of death, the company pays the remaining amount of the debt.
• In the case of permanent total disability, the company pays the remaining amount of the debt.
• In the case of temporary disability that prevents the client from performing his\her regular work, the company pays up to 12 monthly installments where the client defrays the first month installment.
• In the case of a breach of the employment contract and unemployment, the company pays the up to 12 monthly installments where the client defrays the first month installment in the case of unemployment according to the terms of the contract
