Loan closure before due date cancels loan insurance?


#1

Someone told me loan closure before due date cancels loan insurance. Is this correct?


#2

Yes you have heard it right. If you ever plan to foreclose your loan you may lose the protection offered by the insurance against your loan. So once your loan is closed the loan protection
plan gets nullified and you will get any refund.


#3

Hi Reba,

While it is generally true, it would be better to check with your insurance company regarding this. In any case, your loan insurance policy may expire or lapse if you make full repayment of your loan of if you transfer the loan to another bank.

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Cheers,
Team BB