Credit Disability Insurance: Cover Your Monthly Payments

Credit disability insurance covers your monthly payments towards a given debt if you are ever injured or disabled to a point where you cannot work. Depending on the policy, and the severity of your disability, credit disability insurance can either help you make payments for a few months, or for the balance of your loan.

Most policies take effect after you have been unable to work for more than 30 days; it is possible to request a longer period for some policies, which could lead to lower premiums. After this waiting period, the insurance will cover your monthly payments until you have made enough of a recovery to return to work. If you are permanently disabled, most credit disability insurance policies will cover your remaining balance, but will do so through monthly payments rather than paying the balance of your loan in full.

Types of Credit Disability Insurance

Credit disability insurance can cover any kind of loan – mortgages, car loans, or even credit cards. Insurance policies covering credit card debt will only pay the minimum amount due each month, though, and your account will continue to accrue interest.

You may also purchase credit disability insurance which covers only 12 or 24 months’ worth of payments. Because of the limited payment length, they offer much less protection – but they are also much cheaper, and for smaller loans, twelve months of payments may be all you would need.

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