Banks offer three kinds. Life: on the borrower's death the policy repays the balance. Disability: on illness or injury it takes over payments. Job-loss: covers payments for usually 6–12 months after a redundancy. On a mortgage the first one is usually required, the other two are voluntary. On a cash loan all three are voluntary, though the branch adviser will try hard to make them sound mandatory.
The cost is calculated on the loan amount and added to the principal. Example: 30 000 PLN loan over 5 years, 8% insurance = 2 400 PLN. Added to the principal it grows with interest and effectively costs about 2 800 PLN. If nothing happens in five years, it is a loss. If you fall ill and cannot work for a year, the policy pays 4 800 PLN worth of instalments. The maths depends on your risk profile.
Key traps. Exclusions in the policy. Standard exclusions: death from a known illness, accident under the influence of alcohol, suicide in the first two years, extreme sports. On disability — no cover for the self-employed in year one of the business, no cover for chronic illnesses diagnosed before signing. Read the terms, don't just sign.
Frequently asked questions
Within 30 days of signing — no reason needed. After that — per the policy terms, usually yes, but without a refund of premium.
Yes, in proportion to the unused period. Written request to the bank or directly to the insurer, citing CJEU ruling C-383/18.
Yes. Mandatory insurance enters the RRSO formula — which is why two loans with the same interest rate can have different RRSO figures.