Loan Protection Insurance: What It Is & How to Use It

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Loan Protection Insurance?
How Does Loan Protection Insurance Work?
Types of Personal Loan Protection Insurance
Credit disability insurance: This covers loan payments when you can’t work because of illness or injury. Credit life insurance: If the policy owner dies, this insurance will pay part to all of the remaining balance of a covered loan. Credit property insurance: When personal property is used as collateral for a loan—and the asset is stolen or destroyed by accident or disaster—this policy provides protection. Involuntary unemployment insurance: Lose your job through no fault of your own? That’s what this type of personal loan protection covers.
Standard Policy
Age-Related Policy
Typical Loan Protection Insurance Cost
What Is the Benefit of Having Loan Insurance?
What Are the Risks of Having Loan Protection?
Common Reasons for Being Refused Loan Protection
Part-time employment Short-term employment Pre-existing medical conditions Can only work your current job Self-employment
Part-Time Employment
Short-Term Employment
Pre-Existing Medical Conditions
Can Only Work Your Current Job
Self-Employment
Is Loan Protection Insurance Mandatory?
Personal Loan Resources
The Takeaway
Frequently Asked Questions
Photo credit: iStock/Vertigo3d
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About the Author
Kelly Boyer Sagert is an Emmy Award-nominated writer with decades of professional writing experience. As she was getting her writing career off the ground, she spent several years working at a savings and loan institution, working in the following departments: savings, loans, IRAs, and auditing. She has published thousands of pieces online and in print.
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