There are many things you can't change that can make it impossible for you to pay back your loans. You could get sick or hurt in a way that keeps you from working for a long time. Your boss might have to cut costs and lay people off or lower wages. If you work for yourself, maybe things aren't going as well as you'd like and you're not making as much as you'd like. It could be that your costs have gone up or that interest rates have gone up, making it hard for you to make payments.
A lot of us worry about what could happen. Some of us may be losing sleep over it, especially if we have borrowed a lot and are already close to being able to pay it back. People nearing retirement age or with young children may also worry a lot about these things.
Insurance for loans
This is why insurance companies offer loan insurance. Loan insurance is a policy that protects you against the chance that you won't be able to pay back your loan. When you get credit, you will usually be asked for it. You should know that loan insurance is not required, and you can't be turned down for credit if you don't get it. If you do want to buy it, you should compare prices and not buy it from the first insurance company you find. Prices vary a lot, so it's best to look around.
If you have loan insurance, you can rest easy knowing that if certain things happen that are out of your control, the insurance company will pay back your loans. Some examples would be getting sick, having an accident, or losing your job through no fault of your own. Before you agree to this kind of insurance, you should also know about the terms and what is not covered. Many people pay for loan insurance even though they aren't likely to ever use it. Often, they don't even know they have it. This is because lenders want to add it to your account because it helps them make more money.
Be Aware
Some rules say, for example, that if you lose your job, you have to take the first job you are offered. This might not be a good idea for someone who had a good job but is now offered one that pays much less. They know that if they keep looking, they will find a better job, but their insurance company wants them to take the first job they find.
When you pay for insurance, you should always know what you are getting. Know what isn't covered, and don't buy the insurance if you don't want it. If it was put on your account without your permission, call your creditor right away and ask for it to be taken off.
