What is Credit Life Insurance?
Credit Life Insurance covers your outstanding loan balance in the event of your death or disability caused by illness or accident during the loan period.
Purchasing this insurance is entirely up to you — it does not affect the bank’s decision to approve your loan.
This insurance protects your family and loved ones from the financial burden of repaying your loan in case of unforeseen circumstances.
When applying for a loan with Bank Respublika, you will be offered Credit Life Insurance options from different insurance companies, and you may choose the policy that best suits your needs.
Frequently Asked Questions
What is Credit Life Insurance?
It is an insurance product that protects the borrower in the event of death or disability during the term of the loan. If either occurs, the insurance company repays the remaining loan balance to the bank.
Why is it important?
If a borrower passes away or becomes disabled, the debt obligation transfers to family members or guarantors, which may create financial hardship. Credit Life Insurance helps protect them from this responsibility.
Who can apply for Credit Life Insurance?
Any individual between 18 and 70 years old who has taken out a loan.
What documents are required?
For loans below a certain amount, no additional documents are needed. If the amount exceeds the limit, you will be asked to fill out an application form.
When does the insurance company cover the loan?
If death or disability occurs while the loan agreement is active, the insurer repays the remaining loan amount.
What types of loans are covered?
Credit Life Insurance applies to all loan products offered to individuals.
How much does Credit Life Insurance cost?
The cost of the policy depends on the loan amount, loan term, and the borrower’s age. For detailed information, please contact the insurance companies directly.
What is the insurance period?
The insurance period matches the duration of your loan agreement.
When does the insurance policy terminate?
If a loan is repaid early, the insurance premium is not paid on time, the insurance company has fulfilled its obligations (i.e., made a payment equal to the outstanding loan amount), or in other cases stipulated by law.
What happens if I repay my loan early?
You will receive a refund of the unused portion of your insurance premium, minus administrative costs.
Can I insure an existing loan?
Yes, you can insure your life for the remaining loan term and balance.
How is it different from other types of insurance?
Unlike other insurance products, Credit Life Insurance covers the entire loan amount for the entire loan term.
Is Credit Life Insurance mandatory?
No. Banks are required to offer it, but clients are free to decide whether to purchase it.
Can I buy insurance if the loan is in my spouse’s (or another person’s) name?
No. The insurance applies only to the person who took out the loan. You can only insure loans registered in your own name.
If someone else took a loan in my name, can I still get insured?
Yes. You can take out life insurance to protect yourself and your family, and to avoid possible disputes with the person who borrowed in your name.
Who pays my loan if I die and don’t have insurance?
By law, your loan obligations transfer to your heirs, who will be responsible for repayment.
Can I cancel my insurance and get a refund?
Yes. If you cancel the policy, a refund for the unused period will be made, minus administrative costs. However, after cancellation, your heirs will be responsible for repayment in the event of death or disability.
Does my insurance become invalid if I delay loan or insurance payments?
Yes. If your insurance premium is not paid on time, the policy may be canceled shortly thereafter.
What’s the difference between Credit Life Insurance and Health Insurance?
Health Insurance covers medical expenses, while Credit Life Insurance protects against financial loss caused by death or disability. Health Insurance does not make payments in these cases.
Does it cover my loan if I lose my job?
Unfortunately, no. The policy only covers death and disability.
Will I get a refund if no insurance event occurs by the end of the loan?
No. The premium covers your protection during the loan term, so no refund is provided when the policy expires.
Are the insurance prices the same across all banks?
No. Premiums are set individually by each insurance company, although the differences in price are usually small.
Are there age limits?
Yes. The product is available to individuals aged 18 to 70.
Are payments made for temporary disability?
Yes. If temporary disability is confirmed, monthly payments will be made proportionally to the degree of lost working capacity.
For example: if your monthly loan payment is 100 AZN and your disability level is 40%, the insurance company will pay 40 AZN per month.
Can I insure several loans at the same time?
Yes. You can take out a separate insurance policy for each loan.
Will insurance payments appear in the Centralized Credit Register (CCR)?
No. At present, Credit Life Insurance data are not displayed in the CCR.
Does the insurance cover the entire loan amount or only part of it?
The policy covers the entire outstanding loan amount for the full duration of the loan.
If I pay for insurance but miss loan payments, will my debt still be covered in case of death or disability?
Yes, but only for the portion of the debt calculated as of the date of the insured event. Overdue payments and accrued interest before that date are not included.
What happens if I become disabled without insurance?
In that case, you will need to repay the loan yourself.
What happens if I die without insurance?
Your debt will pass to your heirs, and the bank will require repayment from them.
Who cannot be insured?
According to the "Rules for Borrower Life Insurance under Loan Agreements," the agreement is not concluded with individuals under 18 or over 65 years of age, those registered with drug addiction, mental health, tuberculosis, or dermatovenereology clinics, or those suffering from hepatitis C, cancer, chronic cardiovascular diseases, or HIV/AIDS.
Furthermore, since life insurance under a loan is voluntary, the insurance company may refuse to issue a policy if the application specifies illnesses or conditions that increase the risk.
