Credit insurance comes in several different forms:
Credit life insurance - the outstanding balance is paid in the event of your death.
Credit
accident and health insurance - monthly credit payments are made for
you during periods when you are unable to work due to accident or
illness.
Credit unemployment insurance - monthly credit payments are made for you during periods when you are unemployed.
Credit
insurance is a form of insurance where you are the purchaser and the
lender is the beneficiary. The payments will be made directly to the
lender. Though lenders sometimes offer or forward offers of credit
insurance, your acceptance or rejection of credit insurance normally is
not used as a factor in deciding whether to extend credit to you.
If
the lender required credit insurance, the premium charged for the
insurance must be included in the disclosure of the APR. In deciding
whether to purchase credit insurance, consider other available forms of
insurance (such as term life insurance or disability insurance) and the
cost of such insurance. The credit insurance offered through your
lender may not be the best deal.
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