What is Credit Insurance?
Credit insurance usually is optional, which means you don't have to purchase it from the lender. Before deciding to buy credit insurance from a lender, think about your needs, your options, and the rates you're going to pay. You may decide you don't need credit insurance.
If you decide to get credit insurance be aware that it can be an expensive form of insurance. For example, it may be less expensive and more practical for you to get life insurance than credit insurance.
Before deciding to buy credit insurance, ask the lender the following questions:
How much is the credit insurance premium?
Will the credit insurance premium be financed as part of the loan?
Can you pay monthly instead of financing the entire premium as part of your loan?
How much lower would your monthly loan payment be without the credit insurance?
Will the insurance cover the full length of your loan and the full loan amount?
Can you cancel the insurance? If so, what kind of refund is available?
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