Lending provides banks with most of their profits. Along with a loan, banking companies offer customers several services for a fee. One of these services is loan insurance, and it is not offered, but imposed, arguing this with an increased likelihood of approval of the application. Can a person refuse insurance?
What is insurance for?
Many citizens are sure that insurance for a bank is a kind of another type of income. However, it is not. A banking organization, giving loans to people, wants not only to get them back, but also to have some profit. She knows that anything can happen in life, and a person will not always be able to pay off normally for a loan.
It is at this moment that the insurance comes to the rescue of the bank. Insurance is needed in case of a force majeure situation, in which risks are minimized, and the bank will receive money no longer from a person, but from an insurance organization.
Insurance laws
According to the laws, it is everyone's business to issue an insurance policy when issuing credit products, therefore any methods of persuading a borrower to purchase such a policy are contrary to the law. This is also indicated by the law on the protection of consumer rights. It says that you cannot offer a service if another is provided. So in the case of "vparivanie" insurance, you can contact directly the Central Bank or another regulator.
It is also important to know that there are types of insurance that cannot be terminated. For example, when it comes to mortgage lending. The inability to refuse insurance applies to those loans for which a collateral is provided. In all other cases, the insurance can be canceled. You can opt out of the following types of insurance:
- Human life and disability insurance. In the event of the death of the person who took the loan, his heirs can refuse to repay - this will be the responsibility of the insurance company.
- Job loss insurance. Such a policy will start working only if the citizen is laid off, but not fired.
The legislative framework
If a bank employee in every possible way tries to convince a client to take an insurance policy, arguing that this is the only way to start applying for a loan, a person has the right to refuse insurance. If the employee continues to insist, you can motivate the refusal by referring to Federal Law 353 On consumer loan of 2013-21-12. You can also contact the management directly or call the hotline.
Previously, the refusal of insurance could be carried out by referring to the Civil Code, but it is almost impossible to return the money that was spent on paying for the insurance policy.
Now, in 2018, a person has the opportunity to return money for an insurance product within five days from the date of signing the loan agreement. Legally, the money for insurance can be returned within 90 days, but in this case, it will not be possible to return all the money.
