1.Become knowledgeable about what credit insurance is:
If you own a credit card you have probably been asked by the company if you would like to add credit insurance. Most are unfamiliar with this type of insurance and either decline it or accept it automatically without knowing if it is the right type of insurance for their needs. As with all insurance, determining need is different from person to person because of our different lifestyles and obligations. Credit insurance may be beneficial to some but just an unneeded cost for others depending on one's situation. Knowing what credit insurance is and the different types can help you make an informed decision.
Credit insurance can come in a variety of forms. The four main types are credit life, disability, unemployment, and property:
I.Credit life insurance
pays off the debt you owe if you die. The beneficiary of the policy has to be the company that the debt is owed to.
II.Credit disability insurance protects your credit rating by making your monthly minimum payment if you become medically disabled. Usually there is a set time period that payments will be made and additional purchases after the disability will not be included.
III.Involuntary unemployment credit insurance will make your minimum monthly payment if you are laid-off or downsized, and again, purchases after the involuntary unemployment would not be covered.
IV.Credit property insurance usually will completely cancel debt on items you purchased with the credit if the items are completely destroyed by specific incidents listed in the policy and a deductible would not apply for the damages to be paid.
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