Credit Insurance
You do NOT need Credit Insurance! It is almost always better to insure yourself against income loss or death by purchasing regular life or disability insurance instead of credit insurance.
When you finance cars, consumer goods, mobile home sales, and residential mortgages, salespeople may try to sell you four types of credit insurance:
Credit Property: Insures against damage or loss to whatever item secures the loan;
Credit Life: Pays the loan balance in case of death;
Credit Disability/Accident and Health: Temporarily makes loan payments in case of accident or ill health; and
Involuntary Loss of Income: Temporarily makes loan payments if you're laid off from work.
Creditors have an incentive to sell credit insurance because they are the primary beneficiaries. They make money from the sale of insurance and they make money when you pay the insurance premium as part of your loan.
Credit Insurance Abuses : There are four common abuses in selling credit insurance;
- Involuntary or Pressured Sales;
- Overcharging;
- Incomplete Coverage; and
- Post-claim Ineligibility Determination.
Reduce Unwanted Solicitations by removing yourself from Mail, Telephone, and Email lists for unsolicited credit and insurance offers. Use these opt out instructions.