Insure a credit

Why take credit insurance? Should you insure your consumer credit?

Your question raises a common problem on the Internet. In fact, Internet users are, more often than others, sensitive to the notion of a better price. They are looking for the lowest price , even if it means removing everything that appears to them "futile". While insurance for a car or real estate is generally considered useful, insurance for a consumer loan seems optional.

What to think about credit insurance?

Like all insurance, borrower insurance appears expensive until the moment when it is really needed ... It especially allows, in the event of a hard blow, not to add a financial problem.
Most often, establishments offer several levels of protection depending on your situation and your profession. The risks covered are, in order , death, illness and Incapacity for work, then unemployment.

Since January 1, 2015, credit offers must indicate the TAEA (Effective Annual Rate of Insurance) in addition to the APR. This new rate should allow consumers to identify (and compare) the cost of insurance .
To simplify, the TAEA corresponds to the APR with insurance minus the APR without insurance.

For example, for a car loan of $ 20,000 over 4 years with an APR of 5.15%, administration fees of $ 0 and death disability insurance at the rate of 1.59% per year of the amount borrowed, we obtain:

• monthly payments without insurance of $ 441.01
• insurance of $ 13.23 per month
• monthly payments with insurance of $ 454.24
• an APR with insurance of 5.15%
• an uninsured APR of 3.56%
• and therefore a TAEA of 1.59%

You must therefore:
- choose the level of insurance according to your situation. For example, a retiree or a civil servant is not concerned by unemployment insurance ...
- compare the different credit proposals and choose the one that allows you to benefit from the best insurance at the best price (costs vary greatly from one establishment to another).
- read the “ little lines ” of the contract to find out what risks are really covered and what will be the compensation in the event of a claim.

RkenneyLaw Credit.com advice

Do not be ostrich thinking that accidents ... it only happens to others!
Take insurance!

TAEA personal loan insurance comparison

Personal loan insurance is a percentage applied to the borrowed capital that you repay each month equally. The TAEA is the Effective Annual Rate of Insurance.
In the table below we indicate the rates applied by the various establishments which offer a single type of insurance online.