What is the Credit Life Insurance Plan?
It is a term assurance plan that provides financial protection for property loan borrowers. Specifically, it helps settle outstanding loan amounts in case you eventually have a risk to life or total and permanent disability of the borrowers. It has 3 types of A, B, C.
"Credit Life just, Turn Liability into Asset"
Features of the plan
Benefits of the plan
Why Credit Life Insurance Plan?
A Customer of a bank has taken a housing loan as following:
Assumption (after 12th installment)::
With the Credit Life Insurance Plan of Camlife:
– If Mr. Camroth got TPD/dies on 1st January 2020, the Company would pay
1. Credit life insurance plan A: the $4,225 which $4,152.80 paid to the Bank and left-over amount of $72.20 paid to Insured’s family.
2. Credit life insurance plan B & C: the $5,000 which $4,152.80 paid to the Bank and left-over amount of $847.20 paid to Insured’s family.
– If Mr. Camroth wants to pay entire remaining outstanding loan by 1st January 2020 to the bank, he must pay the amount of USD $4,152.80. Then he has 2 options with the life insurance policy.
1. He can keep the policy in-force until the expiry date. If he gets death/tpd, the Company shall pay:
a. Credit life insurance plan A: the RSA amount (based on our table) to his family directly.
b. Credit life insurance plan B & C: the $5,000 to his family directly.
2. He can surrender (terminate) policy:
a. Credit life insurance plan A: by receiving amount of $19 (based on our SV table).
b. Credit life insurance plan B: by receiving amount of $40 (based on our SV table).
c. Credit life insurance plan C: don’t have the surrender value.
This is just an illustrated example, not a contract.