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When the unexpected happens, you don’t want personal loan debt to be a worry for you or your loved ones. You may want to consider credit life and disability insurance as a way to further protect your family from unforeseen debt.
Credit life insurance pays off your personal loan if you pass away, while credit disability insurance helps you keep up with payments if you can’t work because of an accident, illness or injury. Whether you’ve borrowed for a car, boat, RV or something else, both insurance options are designed to help protect you, your family and co-signers if you’re no longer able to make payments due to unpredictable circumstances.
Many families in the U.S., including in North Dakota and Minnesota, are taking on more personal loan debt each year. Since credit life and disability insurance can offer additional protection options in case of the unexpected, let’s look at how it works.
5 Takeaways for Credit Life & Disability Insurance:
How these policies work
Personal lenders may offer credit life and disability insurance when you take out a loan. The insurance ends when the loan is paid off, refinanced, transferred to another lender or when it’s due to be paid in full.
To get credit life and disability insurance, you usually need to be the main borrower on the loan and be between 18 and 65 years old. You’ll also need to share some basic health details, like your medical history, medications and whether you smoke or drink. Generally, you won’t need to see a doctor.
For credit disability insurance, specifically, you’ll likely need to show the lender that you have a full-time job. You can do this with a pay stub or a letter from your employer. You may also need to meet some health requirements and not have any pre-existing conditions.
Schedule your free consultation with a personal lender! There’s no obligation, and it can help you learn what you need to qualify for credit life and disability insurance.
When coverage makes sense
Credit life and disability insurance can help if you have a lot of loan debt and want to protect your loved ones from financial stress. It may be a good option if you don’t have regular life or disability insurance or if you want extra coverage for peace of mind.
When getting credit life and/or disability insurance, consider working with a personal lender who can easily add the cost to your monthly loan payments. (Psst. If you set up automatic payments with a Gate City Bank checking account, you could also get a 1% discount!)
Benefits for you and yours
Along with providing financial peace of mind, applying for credit life and disability insurance is usually quick and easy. Plus, you can still add extra protection for your loan, like a dealer-paid warranty (DPW) for repairs or maintenance on what you financed. Or consider gap insurance, which covers the difference between what you owe on the loan and the insurance payout if there’s an accident, theft or total loss.
Cost considerations
Another factor to consider is the overall cost of credit life and disability insurance. The cost of credit disability insurance is based on the balance and interest of your loan. Credit life insurance may cost more than some traditional life insurance policies, but it typically doesn’t have the same medical requirements for coverage. Depending on your situation, talk with your lender to better understand what may be the best fit for you!
Assessing your protection
Before buying credit life or disability insurance, look at your existing insurance to review coverage, and reach out to your lender to learn if you need more. Also, make sure the payments fit your budget and goals.
Credit life and disability insurance gives protection from debt if something unexpected happens. By keeping these key points in mind, you can make the best choice for you and your loved ones.
We‘ve got you covered every step of the way! Contact a personal lender to learn more.
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