Residual debt insurance is often offered for loans, and consumers should take a close look at their costs.
(Photo: dpa)
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Munich It is probably one of the most controversial insurances: The residual credit insurance – also called residual debt or credit default insurance – has long had a reputation among consumer advocates for being completely overpriced, offering incomplete insurance cover and occasionally also being offered with a dubious sales concept.
Now the grand coalition has agreed to cap the commission for the payment protection insurance. Only up to 2.5 percent of the secured loan may be incurred for the customer.
The law is currently in its parliamentary form. A hearing of experts is planned for the second half of April before the law is finally passed.
But what is actually behind the discussion about residual debt insurance? And what do politicians, consumer advocates and the industry say about it? The Handelsblatt answers the most important questions.
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What is payment protection insurance?
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