Lending inherently involves risks, particularly the possibility of loan defaults. For lenders focused on individual or business loans, managing this risk is crucial to sustaining operations and maintaining competitiveness. One effective solution is incorporating insurance products into loan offerings.
With insurance in place, lenders can provide a safety net that protects against borrower defaults caused by unforeseen circumstances such as job loss, permanent disability, or death. This not only reduces lenders' exposure to risk but also enables them to offer more attractive and competitive loan terms to borrowers.
To make this process seamless, Lendsqr has partnered with MyCover.ai to offer credit life insurance integration. This allows lenders to automatically attach life insurance to their loan products, ensuring borrowers are covered without requiring complex setup. Once configured, these insurance policies are created automatically, providing an effortless way to safeguard both the lender and borrower.
Understanding how Credit Life works in Lendsqr
Credit life insurance in Lendsqr is designed to integrate smoothly into the lending process, ensuring both lenders and borrowers benefit from enhanced security. Here's how it works:
Automatic policy creation: Once the lender configures credit life insurance for a loan product, an insurance policy is automatically created when a loan is disbursed.
Coverage scope: The policy covers the borrower’s inability to repay the loan due to events like loss of employment, permanent disability, or death.
Premium payment: Insurance premiums are automatically calculated based on the loan amount and are deducted from the loan amount upon disbursement. Note that the borrower takes full responsibility for the premium payment
How to set up Credit Life insurance
Login to your Lendsqr admin dashboard
Navigate to the "Loan Products" sub-tab under the “Product Management” tab in the customer’s section of the side navigation.
Select a product to edit, or create a new loan product.
Navigate to the Fees section on the loan product and toggle on the Credit Life Insurance button
Proceed to update any other fees or details as required by your organization
Save product or changes
Please note that the credit life insurance fee is not to be edited as the calculation is done automatically by the system