When you take out a loan for a new vehicle, you may be asked if you want to add payment protection or credit insurance.
In the event of an unforeseen circumstance, credit insurance provides financial support to protect your loan from default.
Before you decide, think about your needs and know your options.
Expect the unexpected.
No one likes to think about getting seriously injured in an accident or having a sudden major medical issue, but the reality is it can happen.
If you cannot work, you likely will not get paid. How do you manage your auto payment, living expenses and possible medical bills if limited or no funds are coming in?
Don’t wait until a crisis to plan your savings strategy. Plan now how to protect your family (and your assets) from financial hardship.
Short-Term Payment Protection Options:
The inability to pay your bills can lower your credit score, which leads to higher interest rates on future loans and credit cards. Credit insurance costs vary between lenders and loan terms. Talk to a lender about your personal situation to determine if payment protection is right for you.
Accident and Health Insurance
Provides financial support if you have a serious accident or sudden illness.
If you are under doctor’s care for 14 days or more, this policy pays your loan payment (not exceeding $1,000 monthly) directly to your lender, offering you peace of mind and one less financial burden. This policy may benefit you if you don’t have considerable emergency savings.
Credit Life Insurance
Protects your family from a financial liability if you die before the loan is paid off.
The policy pays your outstanding loan balance to your lender so your loved ones will not be burdened with the remaining payments. Joint coverage is available for both life and disability protection. This policy may benefit you if do not have sufficient coverage elsewhere.
Guaranteed Asset Protection (GAP)
Covers your car loan if you have a total loss accident.
After insurance settles, the policy pays your remaining loan balance, relieving you of the burden of paying on a loan for a car you no longer own. This policy may benefit you if you agree to a loan term longer than 48 months or make a small or no down payment on a new car, which will depreciate in value faster than you pay off your loan.
Talk to a lender for details to see if loan protection is right for you.
Our lenders are happy to answer your questions, even if you are not an RCB Bank customer. Connect with a lender in your area.