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What You Need to Know About Life Insurance When Taking a Loan
Is that insurance policy put in front of you when taking a bank loan mandatory? Learn about your rights and alternatives regarding credit-linked life insurances, which are usually well above the market price.
The Compulsion Myth
Legally, the bank can request insurance when granting a loan, but cannot force you to buy it from *their* insurance company. They have to accept an equivalent policy you bring from outside.
Pledged Creditor (Dain-i Mürtehin)
If you show the bank as the 'Pledged Creditor' in the insurance you take out, in case of death, the insurance first pays off the debt to the bank, and the remaining amount goes to your family.
Frequently Asked Questions
My loan is over, does my insurance continue? ▼
Loan-term insurances end when the loan ends. However, if you have an annual policy, it lasts until the end of the year.
Can I find it cheaper than the bank? ▼
Yes, usually outside agents or Premium Peek recommendations can be 30-40% more affordable.
Can I cancel? ▼
You cannot remain uninsured during the loan term, but you can move the policy to another company.