Credit Insurance Review Oakland CA

A brand new year always starts off with new possibilities and opportunities. For many, a new year offers a fresh start, and thousands will make a New Year's resolution to get their financial matters more organized.

When sorting through various files regarding credit cards, many people may happen upon information regarding credit insurance. In fact, many people may be paying for this insurance and not even realize that they have it. Not a good idea—fees can sometimes be as high as $25 to $30 a month.

What is credit insurance?

In a time when credit card debt is at an all-time high - up to $500 billion last year - many people turn to credit card insurance for a little security. Consumer Reports reveals that yearly sales of credit insurance total $6 billion.

Credit insurance is a type of coverage designed to pay off the minimum monthly payment in the event that a credit user cannot make their payments. Credit insurance is offered more and more, so if you haven't heard of it yet, chances are that you will. It is offered by credit card companies, banks, stores, car dealers...the list goes on.

The average rate of credit insurance is around 75 cents for each $100 of loan coverage per month. This means that if you carry a monthly balance of $3000, the insurance premium would cost you around $22 each month. That may not seem like a lot, but small sums add up: $22 dollars a month costs you $264 a year.

There are several types of credit insurance:

• Credit disability insurance pays on your credit card bills if you become disabled.
  
• Credit involuntary unemployment insurance pays on your credit card bills if you are fired.
  
• Credit property insurance pays to fix or replace items bought on credit or used as collateral.
  
• Credit life insurance pays off a debt if the borrower dies.
  

A typical credit insurance policy offers:

1. Voluntary enrollment
2. Cancellation at any time
3. Rates regulated by the state insurance commissioner, regardless of age, gender or health
4. Premium fee calculated on current monthly balance
5. Benefit of minimum monthly payment if borrower is disabled or unemployed
6. Full payment benefit in the event of death or dismemberment, with a cap set typically at $10,000
7. Personal credit rating maintained in good order in the event of disability or unemployment
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