Explaining Credit Disability Insurance
by Steve Cypher on Monday, April 30th, 2012
How credit disability insurance might help even when financing with poor credit car loans
More loan options
Even with less than perfect credit it sometimes makes sense to add credit disability insurance to an auto loan.
We really do understand the decisions you’ll have to make here at Auto Credit Express where we’ve spent the last twenty years helping car shoppers with low FICO scores find a dealer that can help them get approved auto loans. It’s also one reason our website explains such issues as credit life insurance and buy here pay here loans as well as today’s topic, understanding credit disability insurance.
Credit disability
Sometimes just called “disability” or “accident and health insurance”, credit disability insurance is designed to make your car payments if you are unable to work due to sickness or injury.
If you are injured or become sick, the waiting period for benefits to begin is anywhere from 14 to 90 days from the onset of the disability, depending on the policy. Once this time has elapsed, the insurance company will begin making car payments. Typically, but not always, payments are retroactive to the day the disability began. Permanent disability is not a requirement to receive these benefits.
If you want disability insurance, you usually have to request it before you sign the loan documents. The monthly premium is based on the amount financed as well as the type of coverage you choose. The cost is added to the amount financed, increasing the monthly payment.
The good and the bad
Like credit life insurance, only you can decide if you need this coverage. Here are some things to think about:
The good:
1. Peace of mind – your car payments will be covered if you become either temporarily or permanently disabled
2. One payment – the insurance payment is part of your car payment so there is no additional monthly bill you need to pay.
The bad:
1. Cost – These policies can be more expensive than if you were to take out a separate policy for the loan amount.
2. Interest expense – since it’s part of the loan, you’ll be paying interest on the premium every month – something you wouldn’t be doing with a separate disability policy.
The Bottom Line
Whether your credit scores are high or low (the policy cost is the same), only you can decide if you need credit disability insurance coverage on your auto loan. But keep in mind that if a disability would seriously affect your chances of keeping your car, you might want to compare the costs versus benefits of this type of insurance.
You should also know that Auto Credit Express will forward your credit application to a dealer that understands a wide range of credit situations and can offer you your best chance for an auto loan approval.
So if you’re ready to reestablish your car credit, you can begin now by filling out our online car loans application.
Tags: Bad Credit, credit disability insurance, poor credit car loans
More loan options
Even with less than perfect credit it sometimes makes sense to add credit disability insurance to an auto loan.
We really do understand the decisions you’ll have to make here at Auto Credit Express where we’ve spent the last twenty years helping car shoppers with low FICO scores find a dealer that can help them get approved auto loans. It’s also one reason our website explains such issues as credit life insurance and buy here pay here loans as well as today’s topic, understanding credit disability insurance.
Credit disability
Sometimes just called “disability” or “accident and health insurance”, credit disability insurance is designed to make your car payments if you are unable to work due to sickness or injury.
If you are injured or become sick, the waiting period for benefits to begin is anywhere from 14 to 90 days from the onset of the disability, depending on the policy. Once this time has elapsed, the insurance company will begin making car payments. Typically, but not always, payments are retroactive to the day the disability began. Permanent disability is not a requirement to receive these benefits.
If you want disability insurance, you usually have to request it before you sign the loan documents. The monthly premium is based on the amount financed as well as the type of coverage you choose. The cost is added to the amount financed, increasing the monthly payment.
The good and the bad
Like credit life insurance, only you can decide if you need this coverage. Here are some things to think about:
The good:
1. Peace of mind – your car payments will be covered if you become either temporarily or permanently disabled
2. One payment – the insurance payment is part of your car payment so there is no additional monthly bill you need to pay.
The bad:
1. Cost – These policies can be more expensive than if you were to take out a separate policy for the loan amount.
2. Interest expense – since it’s part of the loan, you’ll be paying interest on the premium every month – something you wouldn’t be doing with a separate disability policy.
The Bottom Line
Whether your credit scores are high or low (the policy cost is the same), only you can decide if you need credit disability insurance coverage on your auto loan. But keep in mind that if a disability would seriously affect your chances of keeping your car, you might want to compare the costs versus benefits of this type of insurance.
You should also know that Auto Credit Express will forward your credit application to a dealer that understands a wide range of credit situations and can offer you your best chance for an auto loan approval.
So if you’re ready to reestablish your car credit, you can begin now by filling out our online car loans application.
Tags: Bad Credit, credit disability insurance, poor credit car loans
