2.Know how credit insurance is marketed:
Now that you know a little more about credit insurance it is important to understand how it is marketed or sold to consumers. Usually companies will ask you to purchase it when you sign-up for the credit or in a later telemarketing solicitation. When credit insurance is purchased it is offered free for a specific time and sometimes the company will give you a check to cash into your bank account as an incentive to try out the credit insurance. By cashing the check you are enrolling in the program.
Unlike a lot of insurance plans, credit insurance can start by a verbal "yes" and does not necessarily require a signature so make sure you pay attention to what you are agreeing to or filling out on your credit application.
3.Decide if credit insurance is for you:
Considering your current and future financial needs is the first step in determining if you might benefit from credit insurance. If you already have substantial life and disability insurance policies, it may be possible that you will have enough coverage in those policies to cover your credit accounts due to your death or disability. But, on the other hand, if you don't have any type of life and disability policies that does not necessarily mean credit insurance is the best choice for you.
Credit insurance may not be as cost effective and is certainly not as flexible as traditional life and disability policies. For example, if you have a lot of credit cards you would have to take out a policy on each of those accounts. With all those monthly policies, you may be able to purchase a traditional life and/or disability policy for less and get more coverage, not to mention after your credit balance is paid with a traditional policy your dependants would receive the remaining amount. And, as previously mentioned, with disability and unemployment insurance only the minimum payment is covered and only for a specified amount of time. It is possible that after interest is accumulated from only minimum payments being made that the balance could be larger after the specified time allowed in the policy for payments.
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