Credit insurance – do you really need it?
Four kinds 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 propert y – Protects personal property used to secure a loan if it’s destroyed during the term of the coverage.
- The premium for credit insurance is often included in the total amount of the loan or credit, meaning you pay interest on it. This can cost you a lot of money over time.
- If you choose to buy credit insurance or debt cancellation coverage, make sure you understand the benefits and terms.
- Double check that you really need the coverage. If you have life or disability insurance you may already be covered.