Imagine the following scenario,
On a seemingly uneventful day, you encounter an unfortunate road accident. The injuries sustained require hospitalisation, resulting in your absence from work. In events of temporary or permanent disability, it may affect your ability to earn an income. But what about your outstanding loan EMIs? Even if you recover in record time, you might miss an EMI!
So, what next? A missed or delayed EMI could negatively affect your overall credit score. Furthermore, you might encounter the relentlessness of collection agents. You might try to seek additional funds through loans or private lenders. This short relief may come at the cost of high-interest rates or short repayment tenures.
Back up Your Finances to Avoid Missed EMIs
For unforeseeable situations, arrange a backup for your recurring repayments in advance. While your chances of getting caught in an accident or experiencing a sudden illness are low, it’s not impossible. Your financial preparedness will safeguard yourself and your family in these events.
Before you brush off the possibility of encountering these problems, check out the following consequences of missed EMIs.
- A single missed EMI could result in a lowered CIBIL score
- Credit scores lower than 750 are less likely to receive more credit
- Lenders will seize any collaterals put against the loan
- Lenders will automatically levy penalty fees and other additional charges
- Recovery agents may begin approaching you or the guarantor for EMI repayment
A shortage of funds will lead to an unsuccessful EMI debit. The bank or lender may send out reminders via calls or notifications to fund your account sufficiently for the next debit attempt. Sometimes, the lender may offer you a grace period to clear outstanding dues. After this, they may send recovery agents or legal notices.
4 Pocket Insurance Plans for EMI Coverage
Whether financially independent or have dependants relying on your income, the best way to ensure safety is to arrange a financial backup. Note down all your recurring repayments like credit card dues or loan EMIs and select viable solutions for them. Fortunately, small-ticket insurance can single-handedly take care of these woes.
The following pocket insurance policies are affordable with adequate cover for various EMI repayment requirements.
Accident EMI Protection Single EMI
After a terrible accident, there’s a chance that injuries may prevent you from resuming work. It could indefinitely hold off your earning abilities and risk defaulting on EMI repayments. This bite-sized policy ensures a stress-free recovery period by covering a single EMI payment for a minimum of one month.
With premiums starting as low as ₹24 for coverage of ₹5,000, you can pay your EMI amount. Moreover, receive coverage for permanent and temporary total disablement, permanent partial disablement and coma.
Accident EMI Protection – Two EMIs
The policy covers you for two EMI payments. Aside from offering an income replacement and disability cover, it provides cash benefits proportional to the EMI amount owed. However, injuries sustained due to adventure sports activities and pre-existing diseases are ineligible for claims.
Starting at ₹29, the range of premiums offered can cover EMIs up to ₹50,000. Furthermore, those between the ages of 18 and 65 can avail the benefits of this policy.
Mediclaim – Health + Accident (Comprehensive) – 1 EMI Protection
Losing the ability to resume work or continue running a business could devastate your finances. Prevent such situations from financially impeding and delaying EMI payments by opting for small-ticket insurance. For ₹1,024, get coverage of ₹50,000, which remains valid for an entire year.
Though, if diagnosed with specific diseases after policy purchase, you’re liable to waiting periods. Depending on the medical condition, the waiting period could be up to 2 years.
Mediclaim – Health + Accident (Comprehensive) – 2 EMI Protection
As a group insurance policy, employers must cover at least seven employees under this plan. It’s a great way for companies to extend their support to fellow team members or employees during times of need. Based on your CTC, you may be eligible for a pre-determined amount of the sum insured. This policy covers two EMI payments for a tenure of one year.
Consider the above bite-sized insurance policies to avoid facing the brunt of financial hindrances caused by an unforeseen accident. Or an illness that could prevent you from making timely EMI payments. Explore a variety of pocket-friendly policies on Bajaj MARKETS for coverage against unpredictable events like these!