Posts Tagged insurance
Personal Loan Insurance
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A personal loan is a great opportunity to have the funds to consolidate your debt, take a college course, repair your car, or even take a vacation. Personal loans can be secured or unsecured. Secured loans are much riskier because they involve providing the lender with collateral to ensure repayment of the loan. If you fail to meet that repayment, the lender will legally own your property, vehicle, or what ever asset you used to secure the loan.
Personal loans offer plenty of opportunity for individuals to improve their overall financial situation if the funds are used in conjunction with good money management skills. However, we all know things take place in life that we have no control over including death of a income source for our household, losing employment, or medical issues. These circumstances can all affect our ability to repay a personal loan. If that loan is secured, then you will lose your asset tied to it as well. To protect yourself from such horrible possibilities, consider purchasing personal loan insurance.
Personal loan insurance is the best protection you can have for repayment when the plan you outlined to cover the loan develops unexpected bumps in the road. The cost of such insurance varies, and is generally determined by the outstanding balance of your personal loan. The type of personal loan insurance coverage you choose will also affect the premium. However, this insurance can offer peace of mind for borrowers, especially those who have a secured personal loan.
There are three types of personal loan insurance coverage to choose from. The specific dollar amounts of coverage will depend on the laws in your State and the dollar amount of your loan. It is important to discuss personal loan insurance with any lender you are considering pursuing a personal loan with.
Personal loan death insurance will pay up to a certain dollar amount in the event of the death of one of the individuals on the loan. In the event that the personal loan only had one person’s name on it, then the loan balance will be paid in full up to the maximum dollar amount. Most personal loans only have a maximum loan amount of $15,000 however it is not uncommon for individuals to take out more than one personal loan.
Disability Plus personal loan coverage is the coverage most often purchased for personal loan protection. It will pay your monthly personal loan payments up to a certain dollar amount. In addition you will receive a cash payment of a percentage of your loan amount each month to help you with the cost of living expenses.
Involuntary Unemployment Coverage Insurance for personal loans is very popular. This type of insurance will pay up to a certain dollar amount per month in personal loan payments for up to a set amount of months.
Personal loans are a great financial tool when used properly. Personal loan insurance is a very responsible invest to help ensure your payments will be made regardless of medical issues, unemployment, or in the event of death. The insurance is especially important for individuals with a secured personal loan. Not only with their credit be negatively impacted, but they will lose valuable assets that are tied to their personal loan.
Personal loan insurance is very affordable and can often be purchased through the lender. It is important that you educate yourself in the area of personal loan insurance and inquire about it at the time of looking into such personal loans. Most lenders are more than happy to discuss this option with you as it further assures them they will receive the funds you borrow.
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Deposit Insurance – Does it Protect You Or the Bank More?
Today, we seek protection for things we regard to be important. For example in life, I believe most people have life insurance. Similarly, to protect bank deposits, governments provide security by implementing deposit insurance.
As many of you know, the aim of deposit insurance is to protect your savings in the bank. This helps provide a sense of security to savers and thus prevents mass withdrawal of savings (known as bank runs) in countries. With this, the structural integrity of banking in countries is maintained and this stabilize financial markets.
However, the kind intentions of governments to protect savers encourages bankers to take more risks with savers’ money. This is because bankers know that the government will pay for their mistakes, since the money risked is insured by the state. History has shown and proven this fact repeatedly. One recent example would be the recent financial crisis in US where banks who lose savers’ money in financial games are bailed out by the Federal Reserve’s printed money.
However, it should be noted that only big banks with political influence are bailed out. For example, Goldman Sachs, JP Morgan, etc. For small banks, they are usually gobbled up by the big banks to gain market share, leading to oligopolies where they gain greater power. If the prize of risking savers’ money for big banks are bailouts that increase their capital, wouldn’t it be reasonable that deposit insurance protect bankers more than savers?
Also, bailouts increase national debt which definitely has to be repaid by higher taxes. This cause taxpayers to bear the burden where the big banks get the free money to lend people. In the long run, this will increase inflation drastically. To make it worse, there have been many supply bottlenecks in commodities for years and this is bound to cause imported inflation for importing countries like China and US. Both of these would add fuel to the fire of inflation, burning the purchasing power of money worldwide faster.
With policies strongly tilted towards the interests of bankers and inflation, I don’t think saving would be a viable strategy to build wealth. I believe that during such periods of high expected inflation, investments that can effectively hedge against inflation would be better ways to build wealth compared to saving. I may be wrong for this but I believe many of you see the advantage bankers have over us and will take action to build wealth with methods other than saving.