The ins and outs of credit insurance

Credit insurance

credit insurance is an insurance policy purchased by a debtor that pays off his or her debts in the event of injury, disability, incapacitation, death, and in rare cases unemployment . It pays off one or more existing debts. In case of a tragedy, credit insurance can be a major financial lifesaver but they are overpriced proportionate to their benefits and loaded with inconspicuous details and unfavorable conditions that can make it so hard to collect. Kredittforsikring

What credit insurance does?

There are three types of credit insurance

  1. Credit Life insurance

This is a credit insurance that pays of your debts and liabilities in case of your demise . This evades your kin and beneficiaries from paying off your debts from your estate. Credit life insurance kicks after a period of 14 days after death is reported. In some cases, credit life insurance compensates for permanent injury.

  1. Credit Unemployment Insurance

This is a credit insurance policy that pays of one’s debts for the period one is involuntarily unemployed or in case of termination of employment. This however cannot kick in if one gets fired, voluntarily resigns, or loses self-employment. Also, one has to be unemployed for quite some time before the policy takes overpayments of debts.

  1. Credit disability insurance

This policy covers a debtor in case of injury or sickness to a degree that one can’t be able to work. It makes payment to the lender is incapacitated. In this case, one has to be disabled for quite some time before the insurance kicks in. You cannot make this insurance and claim on the same day.

  1. Credit property insurance

This policy has indemnity on the debtor’s personal properties that have been used as collateral when taking a loan in case they are stolen, or destroyed in an accident or a natural disaster. This does not cover willful destruction, normal wear, and tear, property damaged for being unoccupied for a certain period of time or loss of property as a result of war.

  1. Credit Trade Insurance

This is a risk management policy that protects non-payment risks from business to business-related trade debts. It protects against payment defaulters and delayed payments. (https://atradius.no)

Why do you need credit insurance?

• Credit insurance protects from unforeseen risk thus the insight helps to prevent losses.
• Credit trade insurance gives a business space and confidence to grow freely from risk threats. It also provides customer-friendly payments due to guaranteed indemnity.
• Credit life insurance saves your loved ones from the burden of laying off your debts in case of your untimely death. It prevents your kin from financial burden and also gives you peace of mind knowing that in your absence, your debts will be settled
• Credit property insurance protects your assets from unseen damage and thus in case of destruction or theft, you cannot have double calamity of losing the assets you placed as collateral and having to offset your existing debts.
• Involuntary Credit Unemployment insurance protects unemployed debtors from adverse poverty by depleting their assets as a result of loss of income.