Types of Credit Insurance

Types of Credit Insurance


Consumer Credit Insurance could be broadly categorized as follows-


(i) Mortgage Protection insurance (ii) Loan protection insurance (iii) Credit card insurance.


In order to determine a fair amount of consumer credit insurance for us, we would need to analyze our needs very carefully.



Mortgage Protection Insurance


Mortgage protection insurance is all about protecting your mortgage interests in the event that you meet with a sudden accident. Your mortgage insurance would bear the mortgage reimbursements on your behalf whenever you undergo a considerable loss of work due to any accident or sickness. It would also take care of your mortgage in case you die early.


Your coverage needs would be ascertained upon the mortgage amount & the repayments. If you are eligible, you might enjoy a two fold benefit of covering the worth of mortgage in case you die as also ensuring the mortgage refunds whenever you undergo a loss of work.


Now, there would be some other important areas that you need to evaluate..


* Even though the mortgage protection coverage would take care of your mortgage, it would be your responsibility to settle all the other associated financial commitments under crisis. You may also want to analyze your life insurance needs other than debt protection


* The duration for which your disability or unemployment claim would be fed


* The waiting period before you would receive the benefits (if any)


* The policy clauses & duration


* The standard to be maintained


* The payment procedures



Loan Protection Insurance


Loan Protection Insurance would come to real good use in case you meet with an uncanny accident. Just as a mortgage protection insurance would take care of your mortgage, it would take care of your loan under circumstances when you suffer from a loss of work by being sick or getting injured. Likewise, your entire loan amount would be repaid in case you die early.


A loan would often turn out to be a huge load upon your finances. It would be healthy practice for you to make regular payments towards your loan & ensure a smooth credit rating under circumstances when you can't work due to any accident.


Your coverage needs would be ascertained upon the loan amount & the repayments. If you are eligible, you might enjoy a two fold benefit of covering the worth of loan in case you die as also ensuring the loan refunds whenever you undergo a loss of work.


Now, the important areas that you would need to evaluate in this case are as follows..


* The duration for which your disability or unemployment claim would be fed


* The waiting period before you would receive the benefits (if any)


* The policy clauses & duration


* The standard to be maintained


Credit Card Insurance


Credit Card Insurance which is often branded as Credit Protection would ensure safety towards your credit card balance in case you are crest-fallen at work. Under circumstances wherein you are injured or sick & fail to work for a considerable period of time, this coverage would ensure that your payments are made in a timely manner. If the outstanding balance gets paid in time it would naturally help you to achieve a good credit rating. Some times they would just freeze all transactions on your account to stop any further damages. You do need to opt for a coverage amount that is proportional to the outstanding amount on your card.


Over here also you have some important areas to assess..


* The duration for which your disability or unemployment claim would be fed


* The waiting period before you would receive the benefits (if any)


* The standard to be maintained



Once you opt for any of the above forms of coverage you would be securing your family interests for a better future & have your own peace of mind as well. It has really become easy to apply for such policies ever since all the major banking concerns & credit card companies have started offering one or more of these products.