We hear it often: taking out a balance insurance policy is a mandatory cost when you take out a home loan or mortgage loan. Taking out such a balance insurance policy is not required by law , but strongly recommended, especially if you are going to borrow a home loan or a high amount!
With this temporary death insurance you build in extra security for your partner and your relatives. With a debt balance insurance you prevent them from getting into financial difficulties after your death because the repayment of the credit becomes too heavy.
Credit balance insurance
Many banks also set a credit balance insurance as a condition for granting a (mortgage) loan and the credit balance insurance is included as such in the loan deed. This way it becomes contractually mandatory. In this way they are sure that the loan amount will be repaid even after your death .
You must take out a loan balance insurance with your lender
Another common misunderstanding: it is mandatory to take out a credit balance insurance policy at the bank or lender where you took out the home loan or loan. There is nothing to it: you can safely work with another insurer . In fact, we strongly recommend it, because there is a good chance that the other debt balance insurer will come up with more favorable rates .
Banks will often try to convince you with discounts to work with them for both credit and debt balance insurance. Nevertheless, it is worthwhile to inquire with other insurers. Be sure to take a look at comparison sites and always perform an online simulation. That way you are one hundred percent ready to pull the best debt balance insurance out of the fire.
A debt balance is not interesting for single people
Debt balance insurance is to the advantage of the partner, so single people do not benefit. Wrong! Because that is not included in your relatives. In the event of a death, they will not only inherit your possessions, but also your debts ...
There is a good chance that the property will have to be sold if there is no outstanding balance insurance. Therefore, check with your relatives in advance about their vision. Do they want to sell the property or do they prefer to keep it in the family?