Life can change in an instant! If something unfortunate happens to you, your loan commitment could place a huge burden on you or your family. To protect your assets and your family’s financial well-being consider credit life and credit disability for your next auto loan. By adding this protection, it can pay off your credit balances in case of death (credit life) or a serious illness or injury (credit disability). This insurance can be secured at the time of closing your auto loan.
Credit life insurance is an insurance policy taken out by the borrowers. The borrowers will pay a premium that is rolled into their monthly loan payment which allows the lender to be paid in full in the event the borrowers dies before the loan is paid off. This protection is most important with joint loans. If either borrower die, it pays off or reduces the insured balance on the borrower’s loan. Your family will not have to return the vehicle to the lender or lose any savings or assets trying to pay the remaining balance.
Credit disability is a health insurance policy taken out by the borrower. Payments are made to your lender if you become ill or disabled and unable to work. A great reason to purchase credit disability is that your employer pays up to 65% of your base salary for short or long term disability leaving you responsible with 35% of expenses to pay. Wouldn’t you love to have peace of mind and not worry how the remainder of your expenses will be paid while ill or disabled?
You must meet all eligibility requirements before adding payment protection to your loan. Depending on the insurance company, there may be a maximum age limit, maximum loan term, term of coverage, limit on the number of payments or the total dollar amount the policy will pay and exclusions.
While closing your next auto loan think about the importance of credit life and credit disability.