Why you should consider credit life insurance

Credit life insurance is a type of insurance policy that can be taken out when you get a mortgage, car loan, a loan from a bank, or a home equity loan. In many instances, the price of the policy itself is rolled in with your monthly loan payment. The value of your policy will slowly decrease as your loan is paid down, and the beneficiary of the policy is typically the lender. While credit life insurance isn't an absolute necessity for every consumer, it does have certain advantages.

1. Prevent your loved ones from financial hardship

Do you have a cosigner or co-borrower on any of your financial obligations? A basic credit life insurance policy can ensure that you're not leaving behind debt for your loved ones to handle in the event of your untimely death. While there is no payout or death benefit for your beneficiaries, credit life insurance can satisfy an outstanding financial obligation.

2. It can safeguard you from the unthinkable

There are several different types of credit life insurance that are designed to protect your assets against other types of risks besides early death: credit disability life insurance, credit involuntary employment life insurance, and credit property insurance. These policies differ from a basic credit life insurance policy. Credit disability insurance and credit involuntary unemployment policies assist you with making payments in the event that you become disabled or laid-off. Credit property insurance insures you against property destruction, so that if your home or car is destroyed, your policy would pay off some, or all, of your remaining balance on the property to the lender.

3. It provides peace of mind

Credit life insurance can be a good option if, for whatever reason, you are not able to obtain a regular life insurance policy via normal channels. Credit life insurance usually doesn't require a medical exam. So, if you've been denied life insurance, and you're worried about how your debts would be repaid in the event of your untimely death, disability, or unemployment, you may have good reason to consider a credit life insurance policy.

To learn more about credit life insurance, or more traditional types of life insurance coverage like term life insurance, whole life insurance, or universal life insurance, visit our Protective Learning Center.

 

 

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