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