Credit Life

Just as it sounds. If the policy holder dies, the remaining loan balance is paid in full leaving the heirs or estate an asset rather than the liability of a debt. Credit Life is generally written as either “single” coverage in which case the sole or primary debtor alone is covered; or as “joint” coverage in which case both debtors party to the loan are covered. Typically a beneficiary is designated at the time of policy enrollment. In the case of joint coverage the primary beneficiary is normally the surviving debtor. (In the event that both debtors die there may still be a secondary beneficiary.)

Coverage is either Net, the net outstanding loan balance is paid and the beneficiary receives clear title to the asset; or Gross, the total of outstanding payments is paid and the beneficiary receives clear title and a check for any unearned interest.

Credit Accident and Health (A&H)

This type of coverage provides protection to the debtor in the event that they are unable to work due to illness or injury. Payments are made on behalf of the debtor until either the loan is paid in full or until the debtor is able to return to work. Policies are generally written as either “elimination” or “retroactive” type coverage.

Examples:

Elimination. With a 30 day elimination policy the debtor must be unable to work for a period exceeding 30 days at which point the insurance will begin making payments from that day forward until either the debtor is able to return to work or until the loan is paid in full. The debtor is responsible for making payment during the first 30 days of disability. Assuming 36 days of disability, 6 days are paid by the policy.

Retroactive. With a 14 day retroactive policy the debtor must be unable to work for a period of at least 14 days at which point the policy will make payments from day one of the disability and continue until either the debtor is able to return to work or until the loan is paid in full. Assuming the same 36 days of disability, 36 days are paid by the policy. If disability lasts 13 days or less, no payment is made.

Credit insurance is regulated at the state level. Premium and commission rates are established in compliance with State law. Licensing requirements are also established by your State insurance regulatory agency.

We represent a variety of programs, all backed by some of the strongest insurance in the industry. Please contact us directly for more information regarding program availability to suit your needs in your locality.

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