Credit Insurance as an Estate Planning Tactic?
Debt is a source of worry for almost everyone, and once you reach a certain age, you start to worry about how your outstanding debts will affect your family after you die. If you do a Google search for ways to protect your estate from creditor claims, the first results will be about establishing a trust. It is easy to get the feeling that you are not the target audience of this content. Its target audience seems to be people who have more time and money than you do to engage in elaborate schemes to protect your money. You are just worried about repaying the debts that you currently owe, and what really scares you if you must take on new debts in the future, after you retire. What if, like so many people who have lived from paycheck to paycheck their entire adult lives, it is your health, and not your retirement account balance, that determines when you retire? Well chosen insurance coverage can protect you from some of the financial hardships of retiring in a time when both your health and the economy are uncertain. For help making realistic plans for your unglamorous retirement, contact a Bronx estate planning lawyer.
How Much Protection Do You Get From Credit Insurance?
If anyone should buy credit insurance, it is people who are approaching retirement age and need to borrow a large amount of money. Credit insurance protects you if you become unable to repay your loan. It will pay the outstanding balance if your inability to pay stems from a qualifying reason. Qualifying reasons include the death of the borrower or the borrower’s unanticipated exit from the workforce due to ill health or involuntary job loss.
Credit insurance policies come with many exceptions; this is the problem with any kind of insurance, namely that insurance companies make it difficult for you to get full payment on your claim because their primary goal is to enrich themselves. The bigger problem with credit insurance, though, is that lenders often sell credit insurance policies to borrowers without the borrowers’ knowledge. They mention the existence of the credit insurance policy somewhere in a long list of fees in the fine print. Therefore, some consumer advocates consider credit insurance a junk fee.
If You Are Going to Bolster Your Estate Plan With Insurance Coverage, Choose Long-Term Care Insurance
Buying credit insurance for a loan that is stressing you out can bring you peace of mind. If there is one insurance policy that can spell the difference between prosperity and hardship, it is long-term care insurance. If you cannot afford a conventional long-term care insurance policy, you should buy a hybrid life insurance policy.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you decide which insurance policies to buy, such as credit insurance or long-term care insurance. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
insurance.wa.gov/insurance-resources/credit-insurance/credit-insurance#:~:text=Credit%20insurance%2C%20or%20debt%20cancellation,making%20payments%20on%20your%20behalf.