Why you need car loan protection insurance
A car loan protection insurance policy will cover the debt on your vehicle in the event of your death, disability, development of a dread disease or retrenchment.
Should you become disabled as the result of an injury, contract a serious illness, or even pass away, your loved ones may find themselves unable to continue paying your outstanding debt.
This is where a Vehicle and Asset Finance Protection Plan can assist.
When do you need car loan protection insurance?
Car loan insurance (or vehicle finance protection as it is also known) ensures that your finance agreement will be settled in the event that you are no longer able to make your repayments, and that your spouse and family do not inherit your debts, but rather that you leave them debt-free.
A Vehicle and Asset Finance Protection Plan provides you with the assurance that if something should happen, you will be covered.
What does car loan protection insurance cover?
This type of protection plan covers debt on your motor vehicle (and other assets you may be paying off) in the event of:
- Dread disease
- Death (including accidental death).
In the event of death, dread disease and disability:
The outstanding loan amount (excluding any arrears) will be settled up to a maximum amount, which may differ between financial service providers.
In the event of retrenchment:
The policy will pay monthly instalments for a certain period of time, such as six months. This time period may differ depending on your financial service provider.
When will the cover end?
Cover typically ends when the following happens:
- Your vehicle and asset finance loan is paid off
- Your vehicle and asset finance loan is cancelled
- A benefit for death, permanent disability or dread disease is paid.
Usually, you can also select the period of time for which you want the cover. This is generally aligned to the outstanding term of your credit agreement but can also be extended to cover your full life.
Standard Bank offers various premium plans for vehicle and asset finance protection, depending on your specific needs.