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Life Insurance for Personal Loans
Loan insurance operates much the same as insurance on mortgages. You have the coverage during the time of your debt. Once you have paid that debt, your need for protection has ended and so your policy ends too. If you should die during this loan period, your coverage pays off the loan. Any other insurance you might have can go directly to your survivors rather than it being used to pay the loan.
No one, including you, knows the odds of suffering an injury or illness that keeps you from working. With this uncertainty, you should be mindful about how loan debts increase your monthly expenses and financial risk. If you should become temporarily or permanently disabled and unable to work, you may lose part or all of your income.
A big reason why you received the loan was because your income indicated you could repay the debt. While disability could take away your income, it doesn’t stop your loan payments. Meeting the loan payments with less income could cause you financial stress. You might have savings to fall back on, but years of savings could be lost when your income is cut short by a few months of disability.
With disability insurance on your loan, you can replace part of your lost income and reduce your financial stress. Usually, the insurer makes the loan payment on your behalf. The amount of the payment and the length of time the insurer will make the payments can vary. Ask your loans officer for details on the policy in place at Lakeland Credit Union.