Credit insurance is one of the most misunderstood and marketed with fraudulent intent in the area of personal finance. The insurance provided by the creditors to debtors range of life and the old standard credit accident and health insurance to such contracts as worthless “life events” that are described below sold. Almost all of these measures are far too expensive and are a source of profits for lenders and sales finance companies.
The use of insurance as a form of security for a loan or other credit granting in itself is not a bad choice. Both the creditors and the debtor can be used to eliminate the risk of death or disability to qualify from the equation. If risk reduction is a factor in providing a lower interest rate, or the basic loan commitment, it can be a win-win situation. The problem arises, however, if the creditor also intimidates or induces a customer to purchase an insurance product not for its effect on the risk, but as an additional and significant source of income. » Read more: Credit-Related Life Insurance – Should You Buy It?
