If you have a mortgage, loan, line of credit, or a credit card, it may be in your best interest to accept the creditor life and disability insurance that goes along with it. Although it will cost you extra money out of pocket, it may just be worth your while.
1. It can give you peace of mind. If something were to happen that drastically changed your ability to earn income, you want to know that you and your family would be protected. Without insurance, you would still be expected to make payments to your credit products. But, with insurance, you would know that it would be paid of in full in the event of your death and that your disability insurance would kick in if you were unable to work due to an accident or injury.
2. It is often very easy to be approved. Depending on your age and your current health condition, you may have difficulty getting insured with a regular insurance company. However, creditor insurance is often automatically approved with no health questions asked at least up to a certain amount. Creditor insurance rules vary depending on the company being used, but for the most part the approval process is a breeze.
3. It is very convenient. Usually your creditor insurance premiums can be paid right along with your card or loan payments so you don’t have to worry about paying a separate bill for your creditor insurance. Also, rather than having to go and increase your existing insurances, you know that with these new credit products, you are taking care of the insurance piece right away. Because we all know you probably wouldn’t remember to increase your existing insurance anyway, and then you wouldn’t be properly covered for the new debt you have acquired.
4. It is affordably priced. If you take the time to compare insurance prices, you will find that creditor insurance is very reasonable and competitively priced. Also, it’s important to note that creditor insurance for lines of credit and credit cards is often only going to cost you money if you actually carry a balance. In other words, if you aren’t using your card or your line of credit, you will not be paying any insurance premiums.
5. There are often other perks, too. Many financial institutions offer really neat perks to their clients along with the creditor insurance such as providing it for free for a certain period of time. You may also be able to keep your premiums the same even as you age. It’s a good idea to find out what perks would be available to you if you were to accept the creditor insurance.
I know that most of us have a one-track mind. If we go into the bank to get a loan or credit card, that’s usually the only thing we expect to get. Most of us overlook our need for creditor insurance, and sometimes we will only have a few seconds to make the decision. So, if you are planning on getting a new credit product in the near future, be prepared for your advisor to ask about insurance. Know what your current coverage is so that you can make an informed decision rather than a rash one.
Pam is passionate about helping people attain financial freedom by providing money saving tips and promoting effective money management. Visit her blog at www.Pennysaverblog.com.