If you’re like many people, when you set out to buy a new car, recreational vehicle, boat, etc., you have to finance your purchase. Making your payments in manageable monthly installments allows you to begin enjoying your purchase right away. Have you ever thought about what happens if you pass away before paying off the balance of your loan? That’s where credit life policies can help. In this article we answer what type of life insurance are credit policies issued as. We give you a balanced review of credit life insurance policies however there are often cheap life insurance options that are more affordable. After reviewing the article below, please click on “View Your Quotes” button at the top of this page.
Credit Life Insurance Is For Borrowers
Simply put, Credit life insurance is coverage that you as a borrower purchase in order to pay your lender after you pass away. The policy repays the loan by making payments to your lender on your behalf.
Credit life insurance is a form of life insurance intended to pay off a borrower’s debt if that borrower should die before the loan is paid off. The face amount of a credit life insurance policy decreases proportionately with the outstanding loan amount as the loan is repaid over time until both reach zero value.
Many financial institutions such as banks and finance companies make it easy for you to afford a credit insurance policy by just by rolling your insurance premium into the loan payment at the time of purchase.
Credit Life Insurance Protects Loved Ones
Life is unpredictable; contemplate what could happen if you were to pass away tomorrow. Possessing credit insurance will guarantee that the title to your purchase will be given free and clear towards your estate and eventually to your beneficiaries.
There are many different variations of credit insurance, and not every insurance or finance company offers the same type of coverage. Credit life insurance repays the policyholders debts when they die. Unlike term or universal life insurance, credit life insurance doesn’t pay out to the policyholder’s chosen beneficiaries. Rather, the policyholder’s creditors receive the value of the credit life insurance policy.
What Type Of Life Insurance Are Credit Policies Issued As – Here Are The Details?
When taking out a personal loan, auto loan or mortgage, you can add a credit life insurance policy to the agreement. The theory behind credit life insurance is to give you the peace of mind that when you pass away, your debts will die with you.
Credit life insurance provides security for shared debts. If you have common debt with another person, like a mortgage with your spouse for instance, then you do want to worry about resolving the debt after you die. If you live in a common property state, your spouse could lose a chunk of your estate to your creditors.
You’re eligible for credit life insurance simply by being a borrower. There is no need to undergo a medical exam to get credit life insurance. So if certain health problems have rendered you ineligible for regular life insurance do not despair. Credit life insurance might be a good alternative to paying for certain types of loans or financing.
Three circumstances typically determine the cost of a credit insurance policy:
The loan amount, the type of credit, and the type of policy.
Always consider your needs when deciding on credit insurance, and consider asking the following before you buy a policy:
What is the annual premium and will it cover the full length of my loan and the total loan amount?
Credit life insurance is an affordable way to supplement your existing life and disability policies. You’re giving your loved ones that extra layer of protection. Credit life insurance protects the lender. A lender therefore, may require you to purchase it. Make sure you read the fine print in the loan agreement carefully.
Additional things you should remember about credit life insurance is :
Do you have other insurance policies, savings, investment or funds to pay this debt in the event of your death?
You not getting the best life insurance rate possible.
Would it be better to buy a term life insurance or disability insurance policy?
Are you paying a separate monthly premium or will it be financed and added to the loan?
Does the credit insurance cover the entire amount of the loan?
When obtaining credit disability or credit involuntary unemployment insurance, be sure you know what the waiting period is. Knowing the waiting period before you are entitled to the benefit and whether the benefit is retroactive is vital.
Are there limits or exclusions?
Are there caps on the amount the policy pays?
What if any is the impact if you have a co-borrow?
In the event of cancellation, what if any refund will I receive?
In summary, what type of life insurance are credit policies issued as depends on several factors. It’s always best to discuss your options or concerns with a licensed life professional. We’re here to assist you in deciding if credit life insurance is a good choice for you.
To find out about other lower priced options available to you, please click on our “View Your Quotes” button in addition you can speak with a licensed agent by calling 866-936-3831. Gary W Blackmon is helping customers from California to New York find cheap life insurance.