Credit Life Insurance for Vehicle

What is Credit Life Insurance for Vehicles?

Credit life insurance offers coverage to the family of the car or bike owner who has availed of a vehicle loan for the car or bike. It is a type of insurance that protects the financial future of the family of the vehicle owner. These plans are affordable and pay the remaining loan in case of the policyholder’s unfortunate death. 

How Does Credit Life Insurance for Vehicles Work?

Let us see how credit life insurance works with the help of an example: 

Karan bought a credit life insurance to protect his wife and two kids from having to bear the burden of his car loan in his absence. 3 years into the policy, Karan suffered an untimely death with the loan unpaid and outstanding. His grieving wife was able to file a credit life insurance for vehicle claim, and the car loan was taken care of by the insurer.

What are the Benefits of Credit Life Insurance for Vehicles?

Let us take a look at the benefits of buying credit life insurance for vehicles: 

• Low Premiums: Credit life insurance offers coverage against large sums of loan at affordable premiums. However, it is important to note that the premiums may increase with age, similar to term insurance plans. 

• Secure Family from Loan: With credit life insurance, you can secure your family financially from having to bear the burden of your remaining loans in your absence. 

• Stress-free Life: Credit life insurance allows you to live a stress-free life by giving your family the needed financial security against your outstanding debts.

• Easy Claim Settlement: In case of an eventuality, your family can easily reach out to the insurer and submit the required documents, to claim quick and easy claim settlement.

• Tax Benefits: You can claim term insurance tax benefits as per the prevailing tax laws of the Income Tax Act 1961.

Final Thoughts

Credit life insurance for vehicles is an important type of insurance that offers security to the family of the loan owner in the event of their untimely demise. You can consider buying this type of insurance in case you have outstanding car or bike loans.

Note: It is suggested to calculate the term plan premium on the term policy calculator online tool by Policybazaar before buying.