Loan insurance

To get loan insurance, or not to get loan insurance? That is the question!

The decision is up to you. However, if you want to feel safe in the event of an unforeseen situation, I would definitely recommend you insure your loan.

The bank does not normally require you to get loan insurance. However, in rare and specific cases, the bank may condition the approval of a mortgage by taking such type of insurance.

If you decide to take your insurance directly in your mortgage bank, the bank will definitely reward you by lowering the interest rate. Whether it really pays off is a matter of individual judgment.

If you are already determined to insure your loan, you should consider whether to take the insurance together with the loan or individually. If you bundle it with the loan, you will have to pay it throughout the maturity of the loan at the same amount. However, if you take it individually, it is more flexible because you can make changes depending on your current needs.

I took my insurance when I lived in my first flat, I had a loan of SKK 600,000. Then I moved to my second flat and got a higher loan. At that time I needed to increase my insurance coverage. After some repayment time, my loan balance had fallen, so I reduced it again. Last year I moved to a family house and once again I needed to make changes to my insurance and raise it to EUR 112,000. If I make an extra payment, I will be able to adjust it again. I simply modify my insurance according to my needs, not according to the bank. The important thing is that I got my insurance when I was 21, I am 33 today. If I got new insurance when I moved, or at this moment, it would be more expensive as I am older.