Credit life insurance is purchased so that the balance of your car loan or credit line would be covered if you die before your debt is paid.
As with many of the policies in the Insurance You Can Do Without series, credit life insurance in too expensive compared to the premiums for term life insurance. With a set amount such as a car loan, this is made even worse since the amount insurance declines as you pay down the loan. The reason it declines with the amount owed is that this form of insurance only protects the bank that lent you the money. If you were to die, the pay out goes straight to the bank. With term life insurance, you set an amount to cover all your debts, plus an additional amount to cover your salary or maybe your children’s education. If you’re debt is reduced before you die, the insurance payout would still be at it’s original amount, so your beneficiaries would receive a larger amount after the debts are paid.
If the cost of credit life insurance, compared to what you get for it, hasn’t made you want to cancel and sign up for proper life insurance, then this might. If you’ve ever signed up for credit life insurance, did you notice how easy it is to get it? There are rather simple, vague health questions and no tests required. If you have a pre-existing condition, this might make you think that this type of insurance is easier to qualify for than term life insurance. The problem is that if you were to die and a claim is made, the insurance company would then begin their post-claim underwriting process. This means that the insurer will decide at that point if you actually qualify to receive a payout, even though you may have been paying premiums for years.
Instead of these loan-specific insurance policies, have a look at term life insurance. You can get an idea of the prices from different insurance companies at Kanetix.
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If you’re going to shop around for term life insurance, you should perhaps also shop around for brokers to ensure you’re seeing as many companies as possible. An alternative site for term quotes is mine at http://www.insurecan.com . You may get a different set of companies – or more companies – by doing so
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Credit insurance is expensive. I agree it is much better to get simple term insurance. It is tough for the average person to shop around for life insurance. Many Canadian looking sites are actually American. One thing people should know: Most sites that offer free life insurance quotes are owned by life insurance agents. If that agent does not represent a certain company, he or she may not display it in their quoting engine. It is best to check out a few sites. One site that is Canadian, is free, and does not exclude any companies is http://www.shopforinsurance.ca .
Attention: The General Manager/Director
I wanted to know if your Company your Credit Life assurance in South Africa on the Internet. I will also call the Estate Agents, Mortgage Originators, Attorney’s and the individual client. I am looking for to your e-mail.
Best regards
Carel Burger