Credit Life and Disability Insurance
- Credit Unions
- Auto Dealers
- Banks
- Finance Companies
- Mortgage Servicers
- Community
Help protect borrowers and your loan portfolio when death, illness, or disability disrupts their ability to repay.
A borrower’s ability to repay can change without warning. Allied Solutions’ credit life and disability insurance helps financial institutions protect their loan portfolios while giving borrowers an option to prepare for the financial impact of death, illness, or disability.
Depending on the coverage, benefits can reduce or pay off an insured loan balance after a borrower’s death or make scheduled loan payments, up to the contract limit, when illness or disability prevents the borrower from working. Benefits are paid to the financial institution.
Allied also supports the sales process with web-based software that streamlines quoting for credit insurance solutions, helping institutions incorporate protection into the lending experience more efficiently.
How Credit Life and Disability Insurance Works
Credit life and disability insurance is typically offered during the loan application or closing process. Borrowers elect coverage, and the insurance premium can be included in their loan payments. Rates are regulated at the state level.
Available coverage can include:
- Credit life insurance: Pays off or reduces the insured loan balance if the borrower dies.
- Joint credit life insurance: Provides protection when both the borrower and co-borrower are named on the loan application.
- Credit disability insurance: Makes scheduled monthly loan payments, up to the contract limit, if illness or disability prevents the borrower from working.
- Joint credit disability insurance: Extends disability protection to a borrower and co-borrower when both are named on the loan application.
By addressing payments or outstanding balances after a covered event, credit life and disability insurance can help financial institutions reduce exposure to delinquencies and charge-offs while providing meaningful protection for borrowers.
Who Needs Credit Life and Disability Insurance?
Credit life and disability insurance may be a fit for financial institutions looking to strengthen borrower protection while managing repayment risk within their loan portfolio.
Consider this solution if your institution wants to:
- Help protect loan repayment when a borrower dies or becomes unable to work because of a covered illness or disability.
- Reduce exposure to delinquencies and charge-offs following covered life events.
- Give borrowers an optional protection product during loan origination or closing.
- Make credit insurance easier for employees to quote and offer through a web-based sales process.
- Complement other borrower protection options with coverage specifically designed around death and disability.
Why Allied for Credit Life and Disability Insurance?
Protect both sides of the loan.
Coverage is designed to help borrowers manage debt after a covered death or disability while helping the financial institution reduce the resulting risk of delinquency or charge-off.
Support multiple borrower needs.
Allied offers credit life, joint credit life, credit disability, and joint credit disability coverage, giving institutions options for protecting individual borrowers and co-borrowers.
Make protection easier to offer.
Web-based software streamlines sales quoting for credit insurance solutions, supporting a more efficient process for employees offering coverage during lending interactions.
Fit protection into the lending process.
The application process is designed to be completed conveniently at the loan application or closing, helping institutions introduce protection at a natural point in the borrower journey.
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Learn MoreFrequently Asked Questions
Credit life and disability insurance is a loan protection solution that helps reduce or pay off a borrower's remaining loan balance or payments if they are unable to continue working due to death, disability, illness, or injury. Financial institutions can offer this coverage during the loan application or loan closing process to help protect both borrowers and loan portfolios.
Credit life and disability insurance works by reducing or absolving a borrower's remaining loan amount or payment if a covered death, disability, illness, or injury prevents them from meeting their loan obligations. The coverage is typically offered during the loan application or closing process through a quick and convenient application.
Credit life and disability insurance helps financial institutions reduce the risk of loan default when borrowers experience a covered death or disability. The solution also includes web-based software that streamlines sales quoting for credit insurance solutions, helping support a more efficient process for offering coverage during lending.
Credit life and disability insurance rates are regulated at the state level. Because each state establishes its own requirements for predictable rates, financial institutions should offer coverage in accordance with applicable state regulations while following their established lending and insurance processes.