Just Say No to Credit Life Insurance?
Just Say No to Credit Life Insurance
If you have recently bought a home or a car, or opened up new lines of credit, you’re probably seeing a lot of offers for credit insurance. Credit insurance is a separate coverage which is often offered at the time of a purchase or when new credit is established, and it strictly applies to the outstanding loan. The bottom line with credit insurance is that, nine times out of ten, it doesn’t make economic sense to buy it. Relative to the amount of coverage they provide it is vastly overpriced. You would be much better off purchasing additional term life insurance to cover additional debt obligations.
The one time out of ten when it might make sense to purchase credit insurance is if you can’t qualify for regular life insurance or it is prohibitively expensive due to health problems.