money sectionmoney section
Credit life insurance is designed with very particular situations in mind. Learn about credit life insurance with help from a Medicare certified life insurance professional in this free video clip.
Credit insurance protects the borrower and the lender in case when the borrower cannot make payments due to death, disability or unemployment. It is sold in connection to a loan account or a credit card. Credit life is one of the insurance products that lenders may offer in connection with a loan or a credit card.
Life insurance policies protect your family in the event of your death by paying the beneficiary a certain sum of money. A life insurance company provides this death benefit in exchange for premium payments. However, the insurer must assess your risk to the company. Sometimes, insurance companies must deny claims due to the excessive risk an individual poses to the company. In these cases, impaired risk insurance companies, concentrating in special risks, will insure individuals who have previously been denied.
Various types of life insurance are offered on the market to fulfill the specific needs of individuals and businesses. One type of special life insurance policy is "credit life insurance." Credit life insurance is of particular interest to those individuals who take out a mortgage.
A 2009 Nielson Report study found that 78 percent of Americans have credit cards. This does not include all the millions of people who owe money for other loan types such as mortgages or auto loans. Unemployment, disability or death can cause a default, ruining the consumer's credit rating and possibly placing a hardship on family members. Credit insurance offers some protection from those circumstances.
Credit insurance can bring peace of mind when you're concerned about paying bills during times of hardship. However, you should shop around for credit insurance to ensure that you're getting the best rates and optimum coverage.
Export credit insurance (ECI) policies can be purchased from commercial insurance carriers as well as the Export-Import (Ex-Im) Bank of the United States as a way to insure against the risk of credit default by international customers. The ability to insure against loss due to default when exporting to foreign markets has distinct advantages but carries a few disadvantages as well.
Credit life insurance is decreasing term life insurance that someone buys when taking out a mortgage. The purpose it serves is to pay off the mortgage in the event of the borrower's death, leaving the family with a home that is paid for. This relieves much financial burden on a family whose primary income provider is no longer living. If you are making a claim against credit life insurance, it is because someone has passed away, and the mortgage against the home should now be retired.
