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There are plenty of questions about insurance. Here are answers to some key questions about payment protection insurance.

What is loan protection insurance?

Loan protection insurance is credit insurance that´s directly tied to your loan.  Credit life insurance is designed to pay off the loan if the borrower dies.  Credit disability insurance is designed to take over the loan payments if the borrower becomes disabled.  The insurance helps protect your credit rating by making sure that the loan won´t end up in default if those events occured.

How is it different from other kinds of insurance?

Loan protection insurance takes care of a specific need.  It´s designed to make sure a debt doesn´t become a burden if the borrower dies or becomes disabled.

How do you get coverage on your loan?

At some time during the process of taking out a loan, you´ll be given the chance to enroll in the loan protection program.  You´ll also be informed of the cost.  If you want loan protection, typically you won´t have to go through a long approval process or take a medical exam. 

Why do people buy loan protection insurance?

Because, it offers a convenient, affordable way to make sure that their family or loved ones won´t be saddled with the burden of a debt in the event of death or disability.  The cost is usually quite affordable.

Do You Have Enough Coverage?

Coverage through the workplace may not be enough.  Many experts recommend carrying an amount of life insurance equal to five to seven times your annual salary.  By this measure, most families are underinsured.

Most disability insurance plans replace at most two-thirds of a worker´s earnings.  If you don´t have additional resources, getting by on two-thirds of your income - especially while recovering from a disability - could be a real challenge.

For more information, contact your loan officer or ask for information by clicking on the link below.

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