What is residual credit insurance?
Residual credit insurance is an important additional product to supplement credit and leasing agreements. The payment obligations resulting from credit and leasing agreements are protected against the risks of death, inability to work and unemployment through residual credit insurance. In many cases illness is insured as well. When a mortgage is taken out many providers also call this residual debt insurance or credit insurance.
How can I take out residual credit insurance?
Residual credit insurance can only be taken out through our product partners in connection with a credit or leasing agreement. Some of our important partners who can arrange residual credit insurance for you are Bank Deutsches Kraftfahrzeuggewerbe GmbH (BDK), Hanseatic Bank, OTTO (GmbH & Co KG) or Quelle. They will be pleased to help you.
Who can be insured?
Insurance coverage is generally available to every natural person whose place of residence is in Germany and who is of age on the commencement of the policy, if and to the extent that they are a borrower under a credit agreement. This can also be a credit card.
Why should the loan instalments be protected against the insurable risks?
As a borrower or lessee you pay monthly instalments. The loss of income if you lose your job or become unable to work is usually substantial. 30 % of the population, for example, would not be able to maintain their standard of living for even 3 months in such a situation, as studies have shown. Then they often find that they can no longer pay the instalments. If you take out residual credit insurance we will pay the instalments during this time, thus taking the burden off your shoulders.*. In the event of death your survivors will be relieved of the burden of repaying the loan as we will redeem it with a single payment.
How are the premiums paid?
You pay the premiums monthly together with your loan or leasing instalment.
What length of time should be selected for residual credit insurance?
The term of the insurance depends on how long you have to pay your instalments.
What is the advantage of residual credit insurance in comparison with a classical term insurance policy?
You should consider that the risks of being unable to work and of unemployment or sickness cannot be covered by traditional term insurance. A further advantage is that you can take out such a policy without first having a medical examination. Your existing life insurance policies might also not take account of the payment obligations that your survivors will have due to outstanding loan instalments. Avoid passing on debts to your heirs and protect your family by taking out residual credit insurance! For if the classical term insurance policy that you may have already taken out also has to be used to pay off the loan, your survivors may be left with only a small amount to safeguard their standard of living.
What benefits are paid in the event of death?
In the event of death the outstanding credit balance is paid off in a lump sum up to the maximum benefit agreed in the contract.*
What is meant by “inability to work”?
Inability to work is the case if you are unable to work in your previous occupation or to carry out any other job that you could do based on your previous experience or education, as a result of a health disorder – whether this is due to illness or the result of an accident.
What benefits are paid in the case of inability to work?
In the case of inability to work we pay the monthly loan or leasing instalment. It is possible for multiple benefits to be paid under residual credit insurance if someone is repeatedly unable to work.*
What benefits are paid in the event of serious illness?
In the event of serious illness the outstanding credit balance is paid off in a lump sum up to the maximum benefit agreed under the contract.*
When do we pay insurance benefits in the event of inability to work?
First of all, we check whether the inability to work that has been reported has been caused by an insured event. The insurance covers accidents and all illnesses that are not explicitly excluded in your contract if they were not already known one year before the commencement of the policy and have resulted in inability to work within 24 months of taking out the policy. If the contract contains no exclusions you will receive your insurance benefits at the end of the contractual restriction period.
What is a restriction period?
For inability to work and unemployment insurance a restriction period is agreed which covers the time between the date of the claim and the start of our obligation to provide benefits.
What is a waiting period?
After you have taken out unemployment insurance there first begins a waiting period in which we have no obligation to provide benefits. This period was agreed in order to exclude claims for losses that were already known at the time when the contract was formed.
What benefits are provided if I should become unemployed through no fault of my own?
In the case of unemployment the insurance pays the agreed monthly instalment resulting from the insured payment obligation. It is possible for multiple benefits to be paid under residual credit insurance if someone repeatedly becomes unemployed. *
When do benefits have to be provided in the case of unemployment?
Benefits are provided if you have become unemployed through no fault of your own – and after the expiry of the waiting periods and restriction periods agreed in your contract.
What am I “unemployed through no fault of my own”?
The insured person has a contract of employment and is dismissed. The insured person registers as unemployed, actively seeks a new job and is not in gainful employment. The insured person receives unemployment benefit of type I or type II.
How can I make a claim under the insurance?
Simply report your claim to your lending bank or to the company to which you pay your instalments. After you have reported your claim we will contact you and request the documents we require. Further information about this can be found here: Download documents.
By when do I have to report my claim?
Report your claim as soon as possible after the loss event.
Why are the benefits paid directly to the credit bank or the retailer who sold me the item purchased on credit and not to me?
By taking out residual credit insurance you have agreed that all benefits under the insurance are to be irrevocably paid to the lender or lessor to be credited to your credit account or merchandise account.
What is default protection insurance?
Default means that you as a consumer, tenant, buyer, borrower or the owner of a business are not able to meet your obligations. This is the case if you are unable to pay your bills for your ongoing expenses due to unemployment, for example, rent, electricity, telephone, or if you own a small business and are not able to execute your orders due to serious illness and therefore have no income, but still have to pay the instalments for the company car or machinery.
Whom do I contact if I want to make a complaint or am dissatisfied after making a claim or while a claim is being processed?
In this case please first call our claim service on 040 64603-140 and ask to be put through to Claims Management or send an email to: firstname.lastname@example.org
* The respective Standard Terms of Insurance apply.