Personal Loan Credit Insurance
Believe me when I say that I know just how you feel. Insurance is just one of those things that we hate to think about but can’t safely live without. We insure our cars, our health, our families, even our vacations. With all the money you may be borrowing, what happens when the unthinkable happens? And it does. Should something happen to you what would become of that loan? Your family is already grieving the loss of their husband, wife, father, or mother; is saddling them with a huge debt something you really want to do? Of course not. That’s why we insure our personal loans.
Today’s economy is volatile at best and people are losing their jobs every day. If you took out that big fat personal loan and now you’ve lost your job, how will you pay it? You guessed it; personal loan credit insurance. Let’s say you’re one of the fortunate ones in that you have been able to hold on to your career. Should you become sick or injured for a long period of time, disability will more likely than not be insufficient income. And what if that runs out? With little or no income, how will you pay the money you owe on your personal loan? You’re catching on; personal loan credit insurance. In the case of sickness, most insurance plans will supply your monthly payments until you are well or until the debt is satisfied. This loan can save your credit rating as well. Some companies even offer Life Insurance for an additional fee.
Every insurance policy has its qualifications and exemptions. Involuntary loss of employment, for example, may have a 12 month limit so check with your insurer. Other qualifications may exist, such as a minimum of time already worked at your specific job and another minimum amount of hours worked per week. Pre-existing medical conditions may mean that if the pre-existing condition keeps you from working or is your cause of death your claim will not be paid. Financial planners can assist you in consideration of these possible disqualifications. Also, being truthful on your application is vital. If your insurer finds out you supplied false information you could be in for a load of hurt.
If you see a certain price advertised for credit insurance that doesn’t mean it will apply to you. Bad credit for high risk applicants will receive a much different quote. You might not even need separate personal loan credit insurance because some banks figure in insurance payments with your monthly loan payments. Go over these in detail to be sure that nothing is left to chance. These policies are written to protect the banks as well as you, so you know that they’re covered; be sure that you are completely covered as well. If the insurance company you went with has a ‘cap’ your entire debt may not be completely paid. Be sure to pursue information regarding this possible situation. Your co-borrower may not be included in coverage. If that other person suddenly can’t pay, due to sickness or job loss, will the entire burden fall on you? Find out before you sign on the dotted line.
Protecting your credit is a big deal, especially when you don’t. Do not hesitate to ask questions when considering insurance for your loan or credit. Those questions can be the difference between you being covered or cornered. If you’re strapped for cash consider not taking the insurance. I am in no way advising you to forgo credit insurance; no way! I’m simply saying that it might be a consideration. Canceling the loan insurance can sometimes be tricky. Discuss this ahead of time to prevent surprises later. Surprises are nice when it’s your birthday but not when it’s your credit. As a final note, be careful out there; there are loan scams that can steal your identity and ruin you financially. Should you ever run across one of these, report it immediately. You will not only save yourself future trouble and grief, you may save someone you care about from making a horrific mistake.