Credit Life Insurance Disadvantages, Drawbacks, Cons, Minuses and Problems

Credit life and disability insurance is used to pay off a debt after you pass on or have lost some parts (dismemberment).


The death benefit drops as you pay down the loan
The lender gets the insurance money when you die
Often not available for large purchases
Nothing goes to your estate, while you paid the premiums
Some consider it gouging for what you get
The premium usually financed on top of your loan amount
Usually not explained to the borrower
The rates are high for what you get
Usually a maximum term of around 48 months
Won't insure folks over 65-70 (those most likely to use it)
Hard to comparison-shop

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