What You Should Know Before Getting A CCI Policy

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It is a well-known fact that a huge number of CCI claims are either denied or withdrawn an even if they are paid out, your best hope would be a few cents for every dollar.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/

  • Find out how much he total policy costs. A common marketing strategy with insurance salespeople is that they tend to present policies as affordable while what they are actually doing is quoting a monthly fee. Make sure you get the annual cost so that you can know just how much of a financial commitment you are making.
  • Another thing to seek clarification for is if the premium will be added to any existing loans you might have. Some policies can only be paid out if you are fired or made redundant and not if you resign.
  • The third thing to find out is what the policy exclusions are. In some situations, you may not be able to use the policy if you have a pre-existing medical condition, are self-employed or above a certain age. One of the pitfalls you want to avoid is paying for something you will never get to use.
  • Find out if any limits exist on the amount and duration of the claimable benefit. In some cases, you will only receive a percentage of the outstanding balance and sometimes, payments by installments may only be for a limited time.
  • Finally, find out if there are any conditions on making claims. With some companies you may be required to work for a specific number of hours to meet the said companies definition of employment. There could also be specified waiting periods that apply before you can make a claim.

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.

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