Credit Life Insurance 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