Credit life insurance policies are taken by mortgagor so as to protect his property on the event of death. If a person has purchased something on credit and dies before repaying entire credit, credit life insurance policy will repay the remaining loan amount. Even though credit life insurance is an additional expense, it is believed as a good investment generally by people for it provides protection to property and in effect it protects the family members of the mortgager on his demise. If the income generator of a family dies this type of insurance will help the family from owing that debt as the amount will be paid off by insurance company.
Credit life insurance policy will pay off any balance payment of insurer in case of his death and will thus protect his family from any foreclosure issues. At times there might be some limitations for the payment that can be made in this way. Even in such a case the amount will be more than average and will provide complete protection to insurer and there are not much instances when a claim is filed.
Credit life insurance is very reasonably priced and is having many attractive options available in market. It is cost effective due to various factors. Some of them are:-
Credit life insurance policies are independently purchasable for lenders like any other policy, but if the policy is offered by lender the rate will be better than one bought by borrower. In many cases credit life insurance policies are offered by lender to borrower so as to secure repayment. As lenders usually buy credit life insurance policies as bulk they can provide the policy at lower rate to the lender. In usual case there is a tie up between lenders and insurance companies for it is easier for lenders to market the policy and sell it to borrowers, which will also help in cost reduction.
Usually credit life insurance is purchased for home mortgage. But it can be purchased for various other loans like car loans, credit card etc. Credit life insurance policies are available for both secured and unsecured loans.
Credit life insurance policies does not require compulsory medical checkup. But for qualifying credit life insurance policy you will have to fill out a medical questionnaire. It will also insist for work requirement and also have age limits. Those above the age of 65 will find it difficult to get a credit life insurance policy.