Find Out More About Credit Card Protection Insurance

Next time you go to secure a personal loan or apply for a mortgage, the lender may offer you the option to purchase credit insurance. Before you say, “Yes,” it is important to understand what credit insurance is and why you might need it.

Credit card protection insurance protects the loan on the chance that you can't make your payments. There are four main varieties of credit insurance. Credit life insurance pays off all or some of your loan if you die. Credit disability insurance, also known as accident and health insurance, makes payments o¬n the loan if you become ill or injured and can't work. Involuntary unemployment insurance, also known as involuntary loss of income, makes your loan payments if you lose your job due to no fault of your own, such as a layoff. Credit property insurance protects personal property used to secure the loan if destroyed by events like theft, accident or natural disasters.

Do you need Company Credit Insurance or a Credit Card Insurance Offer Quote?

Now that you know what types of credit insurances there are and when they can be used, the question is whether you need it or not. Think about your needs, your options and the rates you're going to pay. You may decide you don't need company credit insurance or a credit card insurance offer quote. If you do, credit insurance can be an expensive form of insurance. For example, it may be less expensive and more practical for you to get life insurance than credit insurance.   Here are some questions to ask the lender which may help you decide whether or not to purchase Credit Insurance:

·   How much is the premium?

·   Will the premium be financed as part of the loan? If so, it will increase your loan amount and you'll pay additional interest, and more for points (if points are o­n your loan).

·   Can you pay monthly instead of financing the entire premium as part of your loan?

·   How much lower would your monthly loan payment be without the credit insurance?

·   Will the insurance cover the full length of your loan and the full loan amount?

·   What are the limits and exclusions o­n payment of benefits - that is, spell out exactly what's covered and what's not.

·   Is there a waiting period before the coverage becomes effective?

·   If you have a co-borrower, what coverage does he or she have and at what cost?

·   Can you cancel the insurance? If so, what kind of refund is available?

Before you sign any loan papers, ask the lender whether the loan includes any charges for voluntary credit insurance. If you don't want credit insurance, tell the lender. If the lender still pressures you to buy insurance, find another lender. And review your loan papers carefully to be sure they have been drawn up correctly. Lenders can't deny you credit if you don't buy optional credit insurance - and if you don't buy it directly from them. If a lender tells you that you'll o­nly get the loan if you buy the optional credit insurance, report the lender to your state attorney general, your state insurance commissioner or the FTC. Consumers should ask these same questions about other extra products offered with their loan, such as auto or shopping clubs, home or auto security plans, and debt cancellation products.