If you are healthy and currently employed, could you benefit from optional creditor insurance? Yes, in most cases you can. Most people don't expect to become disabled, lose their job or suddenly die. Unfortunately, the risk is very real but it is impossible to know when one or which one will occur. After an occurrence, it will likely be very difficult for a person to meet all the responsibilities of their normal financial obligations. Medical problems and income reduction from job loss are the top reasons for bankruptcy. (1)
Most people’s greatest asset, their income and their ability to meet their financial obligations, is likely not properly insured. A lot relies on your income, perhaps even more than you think. A loss of income or even a reduction in it, can affect far more than you wish. Creditor Disability and Creditor Job Loss insurance may cover or reduce a covered monthly loan payment. This may free up other money for other expenses. This can seriously impact many aspects of daily life. When money is tight, it could make it impossible to meet all financial obligations, so you may prioritize expenses. This could jeopardize the car you drive if it is financed, the home you live in if the mortgage is not paid, retirement plans if contributions are missed, credit rating due to late payments, ability to pay monthly bills such as electricity, heating and water, as well as normal children or family activities. There are also additional expenses associated with medical treatments, funeral arrangements and job hunting that may be over and above your current monthly obligations.
When you consider the potential financial risk, you will see the possible benefit of Creditor Insurance.
(1) Source: https://www.investopedia.com/financial-edge/0310/top-5-reasons-people-go-bankrupt.aspx
