Ever considered, what would happen if you lose your job? Without your primary, and in most cases, only source of income, how would you pay for the long list of household expenses, let alone pay your loan installments every month on time.
Job loss insurance can be a huge blessing in such an event, and having one will give you the peace of mind that your loan repayment is taken care of, till you find another job.
Mashreq was one of the first banks to introduce job loss insurance with personal loans in the UAE. The optional job loss cover protects borrowers against involuntary loss of employment. If you end up losing your job, your monthly loan installments of up to a certain amount would be covered for a specified number of months.
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How else can you prevent defaulting on your loan repayments?
Unfortunately, not all banks offer a job loss cover with loans, and even the ones that do, don’t offer it with every type of loan. So what can you do to protect yourself against the risk of losing your job, especially if you have one or more debt obligations?
You can consider getting a separate life insurance plan for yourself that offers involuntary loss of employment benefits as part of its features. For example, ADCB’s ‘Secure Life’ life insurance plan also offers a job loss cover of up to AED 6,000 for a maximum six month period. There are six options available for you to choose from – Classic, Silver, Gold, Platinum and Titanium based on the overall sum assured. Monthly premiums range from AED 20-145.
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What you should know about job loss cover
The job loss cover may only be offered as an option to borrowers, and does not come with every personal loan. You will only be eligible for claiming the benefits, if you lose your job ‘involuntarily’. A Letter of Termination would have to be produced at the time of making the claim, among other documents. Also, make sure that you read the policy fine print to know about any exclusions.
You will be charged a premium for the job loss insurance cover. Keep in mind that this is not the same as the commonly offered life insurance cover with personal loans. For example, Mashreq levies a premium of 0.75 percent of the loan principal for providing its Involuntary Loss of Employment (ILOE) cover, while the life insurance cover will cost you 1.25 percent of the principal amount.