FLASH
Shkruar nga Pamfleti
If you still have a loan to repay and something unexpected happens to your life, health, or job, to your income, or to your ability to pay off a loan, would you want the heavy burden of unpaid debt to fall on the shoulders of the people you love most?
Would you like to burden them with the heavy burden of debt?! Risk their financial stability? Their home? Their property? If the answer that comes most naturally to you is "No", please read this awareness-raising article in the context of financial education to the end.
Through these lines, we aim to explain why PPI (Payment Protection Insurance), known in Albanian as debtor's life insurance, is an excellent insurance product with triple value: in the family, in society, and in the economy.
Take care of the family
PPI, or borrower's life insurance, is insurance that protects the bank's outstanding amount of the borrower in the event of death.
Banks, to protect their investments, require borrowers to have this type of insurance.
Each year, the borrower insures the remaining unpaid portion of the loan, depending on the risks.
The client is required to choose the risk of death, or in other words: to insure life. In the event of the borrower's death, the property purchased with the loan remains with the legal heirs.
The family keeps the property purchased with the loan. It will not be affected. The remaining unpaid amount by the borrower will be paid by the insurer.
The borrower's legal heirs enjoy the property and are not left with any financial burden to repay the debt, because the insurer is responsible for it.
This is the value of this insurance from the perspective of family benefits: the loss of a loved one is not accompanied by the financial collapse or stress of repaying obligations to the bank.
This is not the only risk that can be insured with PPI: at the borrower's request, it can also be insured against inability to pay, complete physical disability followed by inability to work, and so on. This depends on the client's own requirements.
How do you reach this agreement and does it work the same everywhere?
This type of insurance works the same wherever the principle of insurance works. Everywhere in the Western World where the free market works it is the same. PPI is not Albanian.
The agreement is seen as tripartite: the person receiving the loan, the bank granting the loan, and the insurance company.
PPI brings triple protection:
First level: The bank seeks credit protection and finds it through PPI.
Second level: The client seeks family protection and inheritance without problems and debt burdens of the property and this is possible through PPI.
Third level: The insurance company assumes the risk in exchange for the insurance premium and provides a market to offer its products.
PPI, or depositor life insurance, should not be seen simply as a banking requirement to secure financing.
PPI is a protection mechanism, on three levels: it protects the family, it protects the bank, and it also protects the economy.
This way, a personal disaster does not turn into a trauma for a bank or a financial avalanche for the economic system. Everything continues to run smoothly.
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