Position of the Insured in Credit Life Insurance

Abstract

This study aims to analyze the position of the insured in credit life insurance involving an insurance company as the underwriter and a bank as the policyholder in the practice of providing credit. In credit life insurance schemes, banks typically require the debtor to become the insured to guarantee repayment of the loan in the event of death. However, the resulting legal relationship often places the insured in a less secure position because insurance agreements are generally concluded between banks and insurance companies without the direct involvement of the debtor as the insured party. This situation creates a potential imbalance of interests between banking institutions and insurance companies, which impacts legal protection for the insured. This study uses a normative legal research method with a statutory and conceptual approach. The legal materials used include laws and regulations governing insurance and banking, legal literature, and doctrines related to legal protection in insurance agreements. All of these legal materials are analyzed qualitatively to gain an understanding of the legal position of the insured in credit life insurance. The results of the study indicate that the position of the insured in credit life insurance has not fully received adequate legal protection because their involvement in the insurance agreement is indirect. Therefore, clearer and more comprehensive regulations are needed to ensure the protection of the insured's rights and to create a balance of interests between insurance companies as insurers and banks as policyholders in credit management. This way, synergy between the two sectors can be achieved without neglecting the interests of the insured.