Credit Life Insurance For Auto Loans
Are you looking to take out an auto loan? Auto loan debt is higher than ever before, at $1.2 trillion in total, averaging at just under $18,000 per borrower. Before you take on some of that debt, you’ll need to make sure you go into it the smart way. When you buy a car, you’re likely offered lots of extra add-ons. It can be confusing to navigate which ones you need and which ones you don’t. One of the things offered is credit life insurance. The question is does one really need credit life insurance for auto loans.
Read on to find out.
What is Credit Life Insurance?
Credit life insurance is a protection measure available to you when you take out an auto loan. In the event of the borrower’s death, it ensures the lender still receives the full amount.
Is it Mandatory?
It’s entirely your choice whether you want to buy credit life insurance for auto loans. It generally offered to you by the finance team at the dealership, but it’s not compulsory.
Credit life insurance is for the benefit of lender, rather than the borrower.
Do I Need to Take a Medical Exam?
Unlike regular life insurance, there is no medical exam required. This is because it’s not the individual who is being insured by the policy, but the loan itself.
How Much Does it Cost?
Why You Don’t Need It
The bottom line is there is no requirement by you to buy credit life insurance. Doing so doesn’t provide any added protection. Why? Because, unless your heir’s are on your auto loan, they won’t be responsible for paying it off anyway.
More Advice on Auto Loans
Credit life insurance isn’t necessary, but car insurance is. See our post on how to get car insurance quotes online to find the best deal for you.
You can also read our tips on new car loan financing to help you make the best decision when it comes to your auto loan.
If you any questions, be the first to shoot in the comments section below!
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