Credit insurance
Life is always unpredictable and unexpected things can always happen to you, the borrower. Being aware of that, finance companies have launched insurance plans to protect borrowers from risks and the fear of leaving debts to their loved ones when they encounter unforeseen circumstances and have no money to make repayments. For example, the finance company may require the borrower to purchase credit insurance.
Let's explore with Tuan and Mai what useful and convenient insurance plans they and their families could use to manage their finances both now and in the future.
PAYMENT PROTECTION INSURANCE – PPI
For example, if Tuan buys a PPI plan with a credit card limit of VND 30 million within 3 years.
According to the example above, the actual amount that Tuan would pay is just over VND 657 per day. In the event of unexpected incidents, such as going missing, accident, illness, or disease resulting in death or total permanent disability, the PPI plan would provide Tuan with 4 basic benefits:
1 — LOAN PROTECTION
In the event of Tuan's death or total permanent disability due to an accident, as the insured, he would receive the sum insured up to 500% of the loan amount from the PPI plan. Therefore, Tuan’s family would not be responsible for the loan when he is no longer able to make repayments.
2 — FAMILY PROTECTION
If a relative of Tuan is injured (or dies), the insurance company would pay 40% of the sum insured on behalf of the customer (Tuan). The insurance plan would help Tuan reduce his financial burden and give him more time to manage his money.
3 — SUPPORTED WITH HOSPITAL FEES
If he had a PPI plan, Tuan would be supported with hospital fees. He would receive an allowance for each day of inpatient treatment, but the total amount would not exceed the sum insured.
4 — Tuan would also be entitled to HOSPITAL EXPENSE INSURANCE. He would be paid up to 3 installments if he were hospitalized for more than 7 days ad unable to repay credit loans. For example, if Tuan were hospitalized from 7 to 30 days, he would be entitled to a payment covering one installment. From 31 - 60 days, two installments would be available. Similarly, over 60 days would be equivalent to 3 installments.
If Tuan were to sign an insurance policy and then change his mind, he would have 14 days to cancel the PPI plan from the date he signed the loan contract/insurance policy without being charged any fees.
ACCIDENTAL DAMAGE AND LIQUID DAMAGE (ADLD)
This is the insurance plan for anyone who wants to buy a new phone - like Mai. With an ADLD plan, Mai could get free repairs with a total limit up to the original purchase price. In addition, for damages caused by accidentally dropping the phone or water, Mai would be able to fix and exchange her phone for another device of equivalent value if it were unrepairable.
The insurance period for this kind of policy lasts from 6 to 12 months. At first, Mai might not be used to the new phone and it could be difficult to avoid carelessness. Therefore, the above insurance period would allow Mai to use the phone without worrying about repair costs and by the time the period expired, Mai would be able to use the phone more proficiently.
The insurance premium depends on the loan product price and the insurance period.
CRITICAL ILLNESS – CI
Tuan and Mai should consider their own health problems once they have a stable income and financial independence. In order to enjoy life with peace of mind, they should actively protect themselves from risks such as critical illnesses.
Currently, critical illnesses are dangerous and their treatment is expensive. In particular, there are more and more young people infected with these illnesses. So, when three following conditions are satisfied:
1. Critical illness occurs for the first time
2. Critical illness benefit is paid when the Insured continues to live 14 days after diagnosis
3. Waiting period is 90 days (from the effective date of the insurance)
the CI plan will provide financial support (from VND 100 million) to policyholders. Premiums are divided by age group and the older you get, the higher the premium. Specifically, 27-year-old Tuan belongs to the 25 - 30 age group. He would have to pay VND 237,000 per year to buy Home Credit’s Critical Illness insurance plan. Mai is a recent graduate and in the 18 - 24 year old age group, with a premium of VND 136,000.
*Updated as of December 2021
HOME CONTENT – HOCO
In the future, when they are financially independent, Tuan and Mai will have their own house or they might buy a house to live in with their family. They shall decorate their new house with modern furniture, equipment, and electronics, but there is a risk that since the furniture will be new, the arrangement may not be tidy and the furniture could be easily damaged.
The HOCO plan would help Tuan’s and Mai’s family protect furniture and electronics located in their residential area (recognized as the contact address on the contract) with a value of up to VND 50 million. They would only need to pay a premium of VND 572,000 to be insured for 12 months. During this 12-month period, they could get used to and arrange the positions in the house in a reasonable and neat way.
TWO WHEEL INSURANCE – TWI
If you owned a new motorbike like Tuan, you’d likely always be worried that something might happen to your motorbike such as theft or a broken throttle. Problems like these could empty your pockets. Therefore, the TWI plan would be the perfect and safe choice for your vehicle. With a 12-month insurance period, this comprehensive product solves 3 common motorcycle risks: breakdown, accident, and loss.
The premium also depends on the motorbike’s value. Home Credit offers 3 main insurance plans for you to choose from for your property:
* Updated as of December 2021
In order to protect yourself and your loved ones from unexpected risks or incidents, you should have plans and options for yourself. Insurance plans are useful as you will always be ready to respond and cope with difficulties. Today, there is a wide variety of insurance plans to suit the needs and financial capabilities of consumers. Therefore, choosing the necessary products for yourself will make your life easier and more fulfilling.
