Q: I heard that banks have insurance for each personal loan. How does this help my case if I have defaulted and am now going to face legal action? A: You may request the judge to ask the bank to produce loan or credit card application documents to check whether such insurance is applicable to you…

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Does bank insurance cover defaulted debts?

Dear Sir/Madam,

I heard that banks have insurance for each personal loan and credit card debt they lend.

How does this help my case if I have defaulted and am now going to face legal action?

Mohamed Fawzy

Hamdan Al Kaabi Advocates & Legal Consultancy

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27 Mar 2023, 10:29

Dear questioner,

You may request the judge to ask the bank to produce loan or credit card application documents to check whether such insurance is applicable to you or not.

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Khaled Ebid

KHE Legal Consultancy

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27 Mar 2023, 14:06

The insurance is in the event of the death of the borrower, and not in the inability to pay.

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Does bank insurance cover defaulted debts?