{"id":330,"date":"2021-11-01T17:09:40","date_gmt":"2021-11-01T18:09:40","guid":{"rendered":"http:\/\/dishustad.com\/?p=330"},"modified":"2023-03-17T20:56:19","modified_gmt":"2023-03-17T20:56:19","slug":"do-i-need-credit-disability-insurance","status":"publish","type":"post","link":"http:\/\/dishustad.com\/index.php\/2021\/11\/01\/do-i-need-credit-disability-insurance\/","title":{"rendered":"Do I Need Credit Disability Insurance?"},"content":{"rendered":"
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\"Credit<\/p>\n

If you\u2019ve ever applied for a personal loan<\/a>, your lender probably offered to sell you credit disability insurance. While it might seem like an unnecessary cost, it can come in handy if you become sick or disabled and lose your income.<\/a>\u00a0Most people assume they\u2019ll never be affected by a disability, but in reality, everyone is at risk of becoming disabled.<\/p>\n

Data shows that 5% of working Americans<\/a> are affected by a short-term disability each year, and only 40% have enough savings to cover at least three months of regular expenses.<\/p>\n

While not everyone needs credit disability insurance, some people should consider it. This article will explain what it is, what it covers, and who needs it.<\/p>\n

What is credit disability insurance?<\/h2>\n

Credit disability insurance is an optional insurance policy<\/a> that is often available when you take out a personal loan.<\/a> If you become disabled, it helps to cover your loan payments while you are out of work and have limited income. If you choose to purchase credit disability insurance, there are several ways you can pay for it.<\/p>\n

The cost might be added to the principal of your loan,<\/a> which is the amount of money you\u2019re borrowing. Paying for credit disability insurance this way can be more expensive because you end up paying interest on the cost of the insurance policy.<\/p>\n

Another option is to pay for it in monthly installments over the lifetime of your loan. If you choose to pay monthly, your premium will decrease as you pay off the loan balance.<\/a>\u00a0Before you can purchase credit disability insurance, you must also meet certain requirements.<\/p>\n

For example, many lenders only offer this type of insurance to borrowers who work more than 25-hours per week and are under the age of 70. Every lending company and\/or insurance company has different criteria.<\/p>\n

How does credit disability insurance work?<\/h2>\n

Credit disability insurance can be purchased through your lender when you take out a personal loan. If you become disabled and are unable to work, you can file a claim and ask your insurance company to cover your loan payments. <\/a>There are several important things to know about it.<\/p>\n

First, you can\u2019t get unlimited benefits. Depending on the terms of your insurance policy, your insurance company will cover your loan payments up to a certain dollar value or over a specified period of time.<\/p>\n

Also, there might be a waiting period until you can use your coverage<\/a>. Some insurance companies will only agree to cover your loan payments if you\u2019ve been consistently paying off your loan balance for a certain amount of time, like 90 days.<\/p>\n

What disabilities qualify for coverage?<\/h2>\n

In order to use credit disability insurance, you must have a qualifying disability that prevents you from working in any capacity. Usually, your lender or the insurance carrier will request to see medical proof of a disability from a doctor or your employer.<\/p>\n

While every lender has different covered disabilities, here are some of the most common ones:<\/p>\n