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You may already know life insurance, but do you know credit life insurance? The insurance world can really be confusing. Benzinga has put together this credit life insurance guide to help you better understand what this insurance product is and if you can benefit from it.
The best credit life insurance companies:
What is credit life insurance?
A life insurance policy is designed to help you leave your loved ones with a safety net when you die. It is of great help if you are the head of the family of your family or if you want to leave something behind for your children and adult grandchildren.
But there is something else that people overlook. Debt is a big problem in today's world, especially if you've gone to college in the past few decades. So what happens to your debt when you die?
This is where credit life insurance comes in. This is a specific type of life insurance policy that has been created to solve this problem. He will pay your outstanding debts when you die. Credit life insurance is optional or optional. You can be an excellent candidate, however, for this type of insurance.
How credit life insurance works
You will likely be offered a credit life insurance policy when you are taking out a loan. It is generally sold by banks when a mortgage is closed. You may also hear about it when you finance your car or open a new credit line. It is usually offered right now as a guarantee that your loan will be paid off even if you die. Similar to a typical life insurance policy, the strong point is that this policy will protect your loved ones if you die.
Credit life insurance policies are issued by an insurance company that works with the loan or line of credit lender. When you purchase the policy, the policy face value is equal to the amount of money you owe on the loan. As the loan is paid over time, the nominal value of the policy decreases. Policy coverage usually begins when the loan originates. The premium for your credit life insurance policy is generally included in the monthly loan payments.
If you die before your loan is fully repaid, your credit life insurance policy will cover the rest of the loan. The value of the policy at that point will be paid directly to the lender.
When credit life insurance is worth it
Credit life insurance might seem like a good idea, right? It's especially interesting if you're making a huge purchase and you're already worried about it. That's why banks will use that exact opportunity to try and sell it to you. In some cases, credit life insurance might actually be a good idea.
If you find yourself in one of these situations, it might be worth considering:
If you have given up your mortgage, auto loan or another loan or credit line with someone else. In these cases, if you die, your reseller will be fully responsible for the rest of the payments on your loan or credit line. This can be a huge financial hurdle for your retailer. If you are married and you are the main earner or the only spouse with an income. A credit life insurance policy may offer an additional level of protection to the spouse in the event of death. If you live in a state that recognizes community ownership. In this case, the spouse may be in love with your debts, even if their name is not even on it.
When life insurance is not worth the credit
Although credit life insurance might seem like a great idea, it isn't always worth the cost. Here are some examples of when you may want to look the other way if you are offered a credit life insurance policy.
If you want to leave money to your loved ones when you die. Here is the concern: if you are an insured and you die, your loved ones will not receive any direct benefit. With regards to life insurance payments, the payment of the policy will go directly to the lender of the loan or the credit line. Although it may have been sold to you as a way to protect your loved ones, they won't actually see a dime. If you have children or close relatives but no spouse. Generally your children or heirs will not be held responsible for any unpaid debts at the time of death. So getting a credit life insurance policy in this case won't do your family much good. If you don't own property with your spouse and don't live in a community-owned state. In this case, since you are the only one on the mortgage or car loan, you are the only person who can be held responsible for the payments. Having a credit life insurance policy would not benefit your family if you suddenly die. If you have no debt, this is the biggest one. If you are lucky enough to have paid off your mortgage, auto loans and credit card payments, you don't really need a credit life insurance policy! You are simply throwing your money into a policy that will do nothing for you.
The best credit life insurance companies
We talk a lot about the best life insurance companies, but let's take a look at the best credit life insurance companies.
1. Ideal for credit insurance options: Securian
One of the confusing things about credit life insurance is that it can sometimes be confused or confused with other types of credit insurance options. Securian is one of the insurance companies that can offer you a variety of credit insurance products. This simplifies policy separation and direct collaboration with the company to understand the benefits of each so that you can choose the right option for your needs.
In addition to credit life insurance, you can benefit from credit disability insurance, credit property insurance and involuntary unemployment insurance. Any insurance product can help in case of difficulties that make repayment of the loan difficult.
2. The best for combining policies: J.T. Miller Company
When looking to find economic life insurance, some people prefer to combine their insurance policies. J.T. Miller offers coverage options in addition to its credit life insurance policies, including employment-based disability coverage and terror disease coverage. Your policies are valid for the entire loan agreement period as long as there is no request for disability, death or terror illness, depending on the policy.
After a claim has been filed, this insurance company immediately covers the borrowers to eliminate outstanding short or long term debt. In some cases, J.T. Miller may be able to combine credit life and credit disability policies for you.
3. The best for the benefits of the agricultural sector: American AgCredit
It is no secret that the agricultural sector has suffered recently. Fortunately, there are companies that specialize in providing financial services to agricultural customers to help them stay up to date. This unique company offers a wide range of insurance products, in addition to mortgage financing, real estate loans and credit lines.
American AgCredit has existed since 1916 and is part of the national agricultural credit system. If you are involved in the agricultural sector, contacting American AgCredit for its products is a great option for you.
4. Ideal for special products: American National
It's always nice to work with a company that doesn't just see things in black and white. American National is an insurance company that offers numerous insurance products to its customers, including credit life insurance. It offers its credit life insurance policies as part of its special product offerings, which are designed to alleviate the worry of unexpected life events. A life insurance and credit disability insurance policy can be purchased from American National, providing wider coverage to assist the family in the event of loss of income due to death or disability.
The company also offers involuntary unemployment insurance to provide additional coverage in the event of involuntary unemployment during the policy. American National also offers Guaranteed Asset Protection (GAP), credit protection for secured loans and more.
5. Ideal for customizable policies: protective
Protection advertises itself as a company full of representatives who have a passion for doing good to their customers. He understands that his customers' needs change over time and is committed to working with you to provide flexibility with coverage.
The protection offers the possibility to customize your policy with other cyclists to ensure you receive the most complete coverage. In addition to credit life insurance policies, you can customize whole life insurance policies, universal life insurance policies, term life insurance policies and more.
What life insurance do I need?
Your insurance needs depend on a number of factors, including your financial status and loved ones. The right life insurance for the elderly is likely to be very different from the right life insurance policy for a thirty year old who has just married. The best thing you can do is review your options. If you believe that credit life insurance can benefit you, don't hesitate to ask for more information when you take out your next loan.
Our tip: find the best solution with Policygenius
Finding the right company for your situation means considering all your options and getting the right advice. Policygenius allows you to get personalized quotes from the best insurers and request the best policy in one place. Their combination of online tools and support from impartial and licensed experts makes Policygenius the best site to help you get the right insurance.