Insured Loan

What Does Insured Loan Mean?

An insured loan is a debt for which repayment is guaranteed by an insurer if the borrower is unable to repay it.

In the United States, this is also referred to as loan protection insurance.

Insuranceopedia Explains Insured Loan

An insured loan can cover credit card payments, car loans, and other financial obligations that a borrower may be unable to meet due to illness, disability, or unemployment. Lending institutions often recommend this insurance for loan applicants.

This type of insurance may be unnecessary if the borrower’s existing policies, such as disability insurance, already cover their loans.

Since the lender’s financial risk is mitigated by insurance, the interest rate on insured loans is typically lower.