What is credit insurance? Based on the latest information published on topics like credit insurance, this type of insurance is designed to cover your credit card or loan payments. In fact, both of these payments are covered in the event that something happens to you. Typically, if you are unable to make the payments that are due, this provider will make payments for you. And, three of the most common and primary reasons for these disruptions in payments are as follows: death, disability or unemployment.
Now, before you are misled into believing that credit insurance is some form of disability insurance coverage, you need to know that there are at least 2 key differences that you need to be aware of. And, that is this money will not be paid directly to you. Instead, it is insurance that ensures that your lender will continue to get paid. Also, these payments will be paid on your due dates so that your credit rating and history are always protected. Therefore, if you are looking for this type of protection, you need to consider this information closely , especially if and when credit insurance is offered to you as an option.
You should also know that there are specific times when credit insurance may be available to you. For instance, if you are applying for one of the following:
Loan for a new vehicle.
loan that is unsecured by an asset
Credit card with a bank or other financial institutions
In either of these cases, you may be offered to buy credit insurance. The cost of this type of insurance, however, can easily add up overtime, based on the balance of your loan each month. For instance, if the balance of your unsecured loan is 5,000, you may be paying around $44 to $67 dollar extra each month, on top of your regular monthly payments.