Cover Yourself for Events Out of Your Control
When taking out a loan to finance a new vehicle, the vast majority of people do so with the confidence that they will be able to meet their repayment schedule for the full term of the contract.
Unfortunately, life is full of twists and turns. Sometimes, personal, medical and financial circumstances change due to events beyond our control; changes which may prevent us from meeting our repayment commitments.
For people with ongoing financial obligations, loan termination insurance can provide a buffer against the sometimes rough road of life. It can also relieve your family from the burden of having to pay when you no longer can.
‘[Loan termination insurance] offers three levels of protection which can cover you for a difference of up to $12,500 should you need to terminate your loan.’
What Does Loan Termination Insurance Cover?
Loan termination insurance exists to assist those with ongoing financial obligations should a change in circumstances mean they are forced to terminate their loan.
This type of insurance provides cover in the event of:
- Involuntary unemployment
- Disability
- Critical illness
- Personal bankruptcy
- Divorce
- International job transfer
- Trauma
If you are forced to return your vehicle to the dealer for any of the above-listed reasons, loan termination protection will cover you for the difference between its market value and the amount still owing to your lender.
This type of insurance offers three levels of protection which can cover you for a difference of up to $12,500 should you need to terminate your loan.
Without insurance, you are personally liable for paying whatever difference there is between the vehicle’s market value and the amount owing to the lender. In the case of serious illness or disability, loan protection could save your family the burden of having to pay out the remainder of your loan contract.
Who Will Benefit from Loan Termination Insurance?
Anyone who is planning to take out a vehicle loan could benefit from loan termination insurance.
No one knows what the future holds. At any point during your loan term, a sudden change in circumstances could mean that you can no longer meet your financial commitments.
Without cover, you would be personally liable for paying the difference between the vehicle’s market value and the amount still owing to the lender. In the case of serious illness or disability, a lack of insurance could also put your family at serious financial risk.
By ensuring you have the appropriate cover in place, you could help to eliminate the potential for serious financial risk to both you and your family in case your circumstances should suddenly change.
Summary
Most people would not dream of taking out a car loan if they were not confident they could meet the repayment schedule.
Sometimes, however, life throws a spanner in the works. If circumstances should arise that are beyond your control, you could be forced to terminate the loan and return your vehicle to the dealer. If this happens, you are personally liable to cover the difference between the market value of the vehicle and the amount owing to the lender.
With loan termination insurance, you are covered for a difference of up to $12,500 depending on which level of cover you have selected. This could save both you and your family a significant financial burden.
For more information on loan termination insurance, insurance in general or to get a free quote, call Rapid Finance on 1300 467 274