Optional Credit Insurance on your Car Loans

Optional Credit Insurance Coverage for Your Car Loans

Stan Moon

There are some options available to you when you're going to finance an auto loan. Two of these optional insurances are called credit disability, and life insurance. While these do share the same names of the normal insurances available, they are a bit different. These are just a quick glance at some of the optional insurance available when buying a new car or used car.

The things to know about this insurance are very simple. If you happen to get sick, or become unable to work, this insurance will take care of part or all of your monthly payments. This will not pay off the car or remove that debt, but will cover it for a determined amount of months.

This policy can vary heavily from each lender, but the basic concept remains the same. It can help you with at least one bill during a time when you're going to need to start sizing down to save as much as you can. This will not kick in unless you are unable to work, or become permantly disabled, nor will this cover the full cost of the loan principal, in most cases.

This insurance will cover you for an agreed upon set amount of months should something happen where you're unable to return to work. This can be very helpful for people in high risk jobs, where you might actually become disabled and need this as a padding to help your future budget.

Much like life insurance itself, this one only takes effect if you should happen to pass during the loan terms. This can vary from place to place with many restrictions and limitations on it, but for the most part it works like this.

If you pass and still owe on the car, the car will be paid off for in full. Now many will argue that this is only making sure the loan doesn't lose on the investment, and to some extent that is true. However, you must realize that when someone passes and they owe on any asset, like a car, then the payments are still owed.

Should you decide to not keep the car, the bank will take it sell it, and should a balance remain on the loan that is charged to the deceaseds estate. So this can help keep you from leaving less to your family should you happen to pass and still owe on an auto loan.

When you're going to find financing to purchase a new or used vehicle, these are the optional insurances available for your auto loan. These can be great for securing your financial future, but by no means are necessary. It is also a good thing to consider that if you go and buy a cheap used car your terms and overall insurances are usually cheaper, and these optional credit insurance may not be available.

Just keep this in mind, especially when going to buy a car, and if you decide to find a car using the internet AutoLiquidator can help. We have plenty of resources and services available for you to use to find the perfect vehicle that suits your needs.