Debt protection insurance is designed to help borrowers by providing financial support in times of need. Whether it’s due to unemployment, sickness, or disability, debt protection insurance can protect the insured from defaulting on their loans.
There are a lot of benefits to this type of protection that will protect you and your family more directly and thoroughly in an unexpected event. If you haven’t thought of debt protection insurance yet, here is a list of reasons why you should consider debt protection options from your local credit union.
RMLEFCU offers you six different options, giving you the flexibility to pick the Debt Protection package that’s right for you. Each option has specific eligibility requirements and a different range of benefits.
Do I Need Debt Protection Insurance?
Debt Protection provides you with the peace of mind of knowing your monthly loan payments will be canceled in the event of death, disability or involuntary unemployment. The cost of debt protection insurance depends on where you live and how much coverage you would like to have. Debt protection insurance can be very expensive if you have a poor credit score and you might end up paying a higher premium for coverage. However, having debt protection insurance can pay off when you select a policy that is inexpensive and will provide the amount of coverage that’s right for you.
A great thing about debt protection insurance is that it helps maintain your current credit score because the policy enables you to keep up-to-date with loan payments. The policy will continue to pay your loans in times of financial crisis, so your credit score is not affected.
Are There Other Options?
If you’re unsure of getting a debt protection insurance policy or if the premium is too high, there are other options you can take to protect yourself and your family from defaulting on a loan. Here are some alternate solutions you can consider to protect your loan:
Life insurance or disability insurance to protect the loan
Using long term savings to repay the loan when an unexpected situation occurs
Building larger emergency savings to cover your loans
Asking family if you can rely on them to pay the debt if necessary
Keep in mind a debt protection policy is beneficial if the premium payments are affordable. Look at it like protection plans offered on small and large appliances and other goods you buy at retail stores. If the plan would set you back an extra $15, it’s probably worth it to protect your expensive item.
How Do I Get Started?
Speak to your local credit union or bank today to see how you can get started on obtaining a debt protection insurance policy!
If you’re an RMLEFCU member, speak with one of our loan representatives today by calling us at 303-458-6660 or sending an email to lending@rmlefcu.org for complete details — including the monthly cost for each option.
We can discuss this program with you, explain how it is different from traditional credit insurance, and provide you with a copy of our new Debt Protection Brochure which outlines the details of each one of our Debt Protection options.