8.  If you are uninsurable due to medical conditions, credit insurance may be something to consider, so that your survivors (or you, in the case of a disability or unemployment) don’t become overwhelmed by debt.

 

9.  Before you sign loan papers, make sure that the terms do not include voluntary insurance premiums.  Some contracts will attempt to sneak in extra charges, and you may be unknowingly signing for them.  Read the fine print.  And, of course, if you want the insurance, ask for it.  All lenders will be glad to explain the options and charges.

 

It’s a common practice to include charges for credit insurance at the time of closing for a mortgage, automobile loan, or other significant purchase.  This is called “credit insurance packing”.  It’s a high profit item for the lender or mortgage broker, so they hope you won’t notice.  They are also hoping that if you do notice, you’ll be so overwhelmed with everything else, and anxious to get done with the closing, that you’ll cave in.  Some unscrupulous sales people may even tell you that if you change the paperwork to take out the credit insurance, it will delay the closing, maybe even jeopardize it.  Don’t let them do that to you, it could make a significant difference in your monthly payment.

 

10.  Whether you decide to sign up for credit insurance or not, make sure to list down all the things you need to look out for. While it is true that credit card insurance can give you extra security, payments for credit insurance is a very expensive form of insurance. If  you decide to purchase credit insurance, just make sure that you conduct a brief but thorough research about all the requirements carefully before accepting the policy offered.

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