Policy Types

Credit Life and Credit Disability Insurance

Credit insurance pays the lender of your loans at a time when you can't pay due to disability, getting laid off work or death. There are different variations of credit insurance you should evaluate.

Protecting Your Assets With Credit Life and Credit Disability Insurance

If you're like many Americans, when you set out to buy a new car, recreational vehicle, boat, etc., you find it's often easier to finance your purchase. This way you can make payments in manageable monthly installments and begin enjoying your purchase right away. But what happens if you pass away, become disabled, or lose your job before paying off the balance of your loan? That's where credit life and credit disability insurance can help.

What is credit insurance?

Credit insurance is an insurance policy that you as a borrower can take out to pay your lender at a time when you can't pay. So if you were to pass away, get laid off, or become unable to work due to a disability that prevents you from making your scheduled loan payments, credit insurance will repay the loan by making payments to your lender on your behalf. Many banks, credit unions, and finance companies make it easy for you to afford a credit insurance policy by simply rolling your insurance premium into your loan payment at the time of purchase.

Why should you buy credit insurance?

Life is unpredictable. And if you are suddenly unable to work, having your credit insurance policy pick up your loan payments can be a big help at a very stressful time. Also consider what could happen if you were to pass away. Having credit insurance will ensure that the title to your purchase will be transferred free and clear to your estate and ultimately to your beneficiaries.

What types are there?

There are many different variations of credit insurance, and not every insurance or finance company offers the same type of coverage. However, there are typically four main types of credit insurance:

  • Credit life insurance - Pays off all or some of your loan if you die.

  • Credit disability - Pays a limited number of monthly payments.

  • Credit involuntary unemployment - Pays a specified number of monthly loan payments if you're laid off.

  • Credit property - Protects personal property used to secure a loan if it's destroyed during the term of the coverage.

How much will it cost?

There are three factors that typically determine the cost of a credit insurance policy: the loan amount, the type of credit, and the type of policy.

What you should consider before you buy a policy

Always think about your needs when deciding on credit insurance, and consider asking the following questions before you buy a policy:

  • How much is the annual premium?
  • Will the premium be financed as part of the loan?
  • Can I pay the premium monthly instead of financing the entire premium as part of my loan?
  • Will the insurance cover the full length of my loan and the full loan amount?
  • What are the limits? What are the exclusions? (What's covered and what's not.)
  • Is there a waiting period before my coverage becomes effective?

To protect your assets, you might consider looking at credit insurance for your next loan. It can be an affordable way to supplement your existing life and disability policies, and give you that extra layer of protection.

Current credit life and credit disability policy holders please call 1-866-493-0184 or visit Protective Asset Protection. Existing agents or dealers as well as those interested in offering Protective Asset Protection products please visit the Protective Asset Protection website.

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Credit Life Insurance

If you became unemployed, passed away or became unable to work due to a disability, what would happen to the balance of your loans? Credit life insurance is offered by many banks, credit unions and finance companies to ease the worry of the unknown by offering policies that would pay on your loans on your behalf in a time of need. This article explores credit insurance in a multiple of options and policies. For more information, visit our learning center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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