Loans

Admittedly enough, all of us have (at one point or the other) fallen into a rut – a loan rut that is. More often than not, if we are working for a company or any business entity at the moment, we acquire the loans mostly from them. If not, we go to more established money lenders like banks.  

Basically, a loan is a debt where a borrower (us) receives a specific amount of money from the lender (company). Naturally there is every effort to pay back this amount, but what makes loans a bit more difficult to overcome is that the interest that usually comes along with the package. Sometimes, when loans are not paid in time, interest is added making the amount that we should pay back increase in volume as well. In some extreme cases, it may even seem that all we are ever paying for is the interest of the loan only. We cannot seem to catch up with the principal amount at all.

This is primarily the reason why many Filipino would rather ask around with unconventional loaning entities (the notorious 5-6 method, remember that?) than ask professional lending companies.  

So what does acquiring a loan have anything to do with insurance? Well, supposing that you have monthly payments due, like: you have a car loan payment or house payment, and for some unforeseen reason you suddenly find yourself out of working commission (i.e. you end up hospital sick for 3 months, or you find yourself in between jobs.) You need to protect yourself from the accumulation of more interest because you simply cannot afford to pay up for the moment.  

Fortunately for many of us, there is such a thing called the loan protection insurance;

• A contingency measure should an event like this happens.
• This is a type of PPI or payment protection insurance that covers a borrower’s debt repayments in case we do end up incapable of working for the moment.
• This type of insurance is open to anyone from 18 to 65 years old who is currently working and may cover our loan payments from one year to two years (depending on the policy we have acquired)