Consumer Credit Insurance is a policy that covers payments due on a credit contract while the borrower is unable to have an income in case of an accident or illness. The policy may also pay out a contract in the event of your death.
Now, while all this sounds like a great plan, we cannot ignore the fact that there is a number of people who do not believe that CCI is a very good idea. If you have maybe heard something of the sort, the two top reasons are poor value and the risk of redundancy.
It is a well-known fact that a huge number of CCI claims are either denied or withdrawn an even if they are paid out, your best hope would be a few cents for every dollar. This means that CCI payouts are usually less than what a client would expect which translates to only a percentage of the debt being cleared.
As earlier mentioned, CCI may be redundant since there is a chance that you may be already covered if you already have another policy, as explained here by Get My Refund. A good example is income protection insurance which offers a cover for sickness, injury and death. In this case, taking out a CCI would not really make sense since you would already be protected in case of any situation that would cost you your income.
So, now that you know the black and white of CCI, what should you do before taking out a policy/
Once you get the policy, you should also remember to make a claim as soon as the insured event takes place since there may be a gap between the time you make the claim and the company paying out your claim.
Finally, in case you experience financial difficulty, make sure to ask your insurer to fast track your claim assessment and maybe even give you an advance payment as soon as you establish your eligibility.