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Is creditor required to offer Death benefits on installment loan

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Valued Contributor

Is creditor required to offer Death benefits on installment loan

Typically on a installment loan, the form has a place to add disability insurance or death insurance. A friend had a creditor tell him US Bank did not provide that. It causes me to wonder whether that is a standardized form or whether a creditor is required to offer that or, if not, what the best method to obtain it would be.







Installment loan reported this month,so technically, I'm at 2 months, but AoYA points were NOT reset. When new CCs hit and it is reset, I'll put the number it is.+1,+2,+2(Forgive typos, mobile.)(Everything said is Just IMHO.)
Scores updated AUG 4, '19. Since then, 5 HP dings to add; will update again.
Message 1 of 5
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Established Contributor

Re: Is creditor required to offer Death benefits on installment loan

Credit insurance or death benefits are not legally required.  When offered they almost always involve an additional payment.  It is a predatory product.  If you were really worried about the possible $10,000 balance on a loan or credit card at the time or your death you could more easily cover than with a very cheap term life insurance policy. Many CU offer a minimal life insurance policy for free to customers.  I think I have one for 3K.

Message 2 of 5
Valued Contributor

Re: Is creditor required to offer Death benefits on installment loan

@rbently: Thank you for responding good to hear from you again. I’m aware one is not legally required to have said insurance. However, my query is whether or not a creditor is legally required to make it available for purchase to an installment debtor. I’m asking for a friend and your advice may be right on point and exactly what we needed to hear. Thank you.







Installment loan reported this month,so technically, I'm at 2 months, but AoYA points were NOT reset. When new CCs hit and it is reset, I'll put the number it is.+1,+2,+2(Forgive typos, mobile.)(Everything said is Just IMHO.)
Scores updated AUG 4, '19. Since then, 5 HP dings to add; will update again.
Message 3 of 5
Established Contributor

Re: Is creditor required to offer Death benefits on installment loan


@Birdman7 wrote:
@rbently: Thank you for responding good to hear from you again. I’m aware one is not legally required to have said insurance. However, my query is whether or not a creditor is legally required to make it available for purchase to an installment debtor. I’m asking for a friend and your advice may be right on point and exactly what we needed to hear. Thank you.

No, there is no legal requirment that a creditor make loan/credit insurance available.  The ones that do offer it because it is an additional profit center for them.  I always decline it.

Message 4 of 5
Moderator

Re: Is creditor required to offer Death benefits on installment loan

As mentioned above OP, there is no legal mandate (Federal, State, etc.) that requires financial institutions to participate or offer such a service or benefit. It is an optional product that a variety of FIs have, but not all of them offer it.
Message 5 of 5
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