Loan insurance gains payment flexibility
The cost of insurance policies on housing loans should be calculated yearly, provided that it is settled as a lump sum payment or through several installments during the year, according to a circular released by the Central Bank (BDL) concerning insurance policies on housing and car loans.
For insurance policies on car loans, the cost of premiums should be calculated for the whole period of the loan and paid in installments throughout the period, unless the client requests a lump sum payment.
These are measures aimed at easing formalities for clients and banks and at encouraging demand for insurance through retail loans.
The latest circular modifies a previous one dating to 2001, which did not mention this issue.
Reported by Leila Rahbani
Date Posted: Jul 22, 2015