PriorityONE Credit Union of Florida

Loan Payment Protection

The Basics: What, Why And How?

There are plenty of misunderstandings about insurance in general and credit insurance in particular. Here are answers to some key questions.

What Is Loan Payment Protection Insurance?

Loan payment protection insurance is credit insurance that is tied directly to your loan. Credit life insurance is designed to pay off the loan if the borrower dies. Credit disability insurance is designed to take over the loan payments if the borrower becomes disabled. The insurance helps protect your credit rating by making sure that the loan will not end up in default if those events occurred.

How Is It Different from Other Kinds of Insurance?

Loan protection insurance takes care of a specific need. It's designed to make sure a debt doesn't become a burden if the borrower dies or becomes disabled.

How Do You Get Coverage on Your Loan?

During the process of taking out a loan, you'll be given the chance to enroll in the loan protection program. You'll also be informed of the cost. If you want loan protection, typically you won't have to go through a long approval process or take a medical exam. Your insurance will become effective as soon as your loan is finalized.

Remember, if you want this kind of coverage, you'll probably want to apply for it before your loan closes. Once your loan has been in place for 30 days, you'll have to provide evidence of good health in order to receive coverage.

Why Do People Choose Loan Protection Insurance?

Because it offers a convenient, affordable way to make sure that their family or loved ones wouldn't be saddled with the burden of a debt in the event of death or disability. The cost is usually quite affordable.

Questions to Ask

Do You Have Enough Coverage?

Coverage through the workplace may not be enough. Many experts recommend carrying an amount of life insurance equal to five to seven times your annual salary. By this measure, most families are underinsured.

Most disability insurance plans replace, at most, two-thirds of a worker's earnings. If you don't have additional resources, getting by on two-thirds of your income, especially while recovering from a disability, could be a real challenge.

How Does the Cost Compare?

The cost of credit insurance is determined only by the size of your loan, not by your age, as it is with most types of insurance. Your premiums only reflect the cost to cover your loan. For convenience, your premiums are included in your loan payments.

No Obligation for 30 Days

When you apply for loan protection insurance, you'll have 30 days to review your plan and make sure it lives up to your expectations. If you decide you don't want the coverage, you can cancel it without obligation.


Information is intended to serve as a general guide to the insurance coverage. Credit life insurance does not cover suicide occurring within one year of enrolling in the plan. In addition, credit life insurance does not cover pre-existing medical conditions in some states.*

Credit Disability Insurance benefits are not provided if illness or injury is the result of the following:

Self inflicted injuries,
Normal pregnancy,
War-related injury or illness,
Medical conditions for which the insured debtor received or had medical treatment, advice, or diagnostic tests either for that same condition or a related condition within the six-month period immediately prior to the effective date of his or her insurance under this policy. Total disability resulting from any such condition or related condition will not be excluded, however, if total disability commences six months or more after the effective date of the insured debtor's coverage under this policy.*

*Note: Some exclusions are not in force in every state or may vary due to specific state requirements. Check your policy or certificate for details.