Life Insurance: One Main Financial's Smart Loan Move

OneMain Financial offers personal loans ranging from $1,500 to $20,000, with fixed rates from 18.00% to 35.99% APR. The company also provides auto refinance loans. OneMain Financial allows borrowers to use a vehicle as collateral for a secured loan, or they can apply for an unsecured loan. The company offers credit insurance, which can be purchased alongside a loan, to protect borrowers and their families in the event of disability, involuntary unemployment, or death. Credit insurance pays the loan in full in the event of the borrower's death, and disability insurance covers loan payments if the borrower becomes disabled due to a covered illness or injury. Involuntary unemployment insurance covers loan payments if the borrower loses their full-time job through no fault of their own, such as a layoff or involuntary termination.

Credit Life Insurance Benefits

Credit life insurance is a type of insurance policy that can be taken out when you get a loan from a bank, a mortgage, a car loan, or a home equity loan. It is designed to pay off a borrower's outstanding debts if the policyholder dies. This type of insurance is especially important if your spouse or someone else is a co-signer on the loan, as it can protect them from having to repay the debt.

Credit life insurance is typically offered when you borrow a significant amount of money, and the policy pays off the loan in the event that the borrower dies. It is a specialized type of policy intended to pay off specific outstanding debts in case the borrower dies before the debt is fully repaid. The face value of a credit life insurance policy decreases as the loan amount is paid off over time until there is no remaining balance.

One of the main benefits of credit life insurance is that it can prevent your loved ones from financial hardship. If you have a co-signer or co-borrower on any of your financial obligations, credit life insurance can ensure that you are not leaving behind debt for them to handle in the event of your untimely death. While there is no payout or death benefit for your beneficiaries, credit life insurance can satisfy an outstanding financial obligation.

Another advantage of credit life insurance is that it can safeguard you from the unthinkable. There are several different types of credit life insurance designed to protect your assets against other types of risks besides early death, including credit disability life insurance, credit involuntary employment life insurance, and credit property insurance. These policies can assist with making payments in the event that you become disabled or lose your job. Credit property insurance insures you against property destruction, so that if your home or car is destroyed, your policy would pay off some or all of the remaining balance on the property to the lender.

Credit life insurance can also provide peace of mind if you are not able to obtain a regular life insurance policy. It usually doesn't require a medical exam, so if you've been denied life insurance, credit life insurance may be a good option to ensure your debts would be repaid in the event of your untimely death, disability, or unemployment.

It is important to note that credit life insurance is voluntary and not a requirement for a loan. It is against the law for lenders to require credit life insurance or to base their lending decisions on whether or not you accept it. Additionally, the beneficiary of a credit life insurance policy is typically the lender, not your heirs. If your goal is to protect your beneficiaries from paying off your debts after your death, you may want to consider conventional term life insurance, where the benefit will be paid directly to your beneficiary.

Credit Disability Insurance Benefits

Credit disability insurance, also known as accident and health insurance, is an optional agreement between the borrower and an insurance company. If you become ill or injured and are unable to work, the insurance company will make the scheduled monthly payments on your loan under the terms set out in the agreement.

Credit disability insurance is usually purchased in conjunction with a loan, and the cost of the policy may be added to the principal amount of the loan. This type of insurance is typically more expensive than term life insurance policies for the same coverage amount, and they don't allow beneficiaries.

Credit disability insurance can help protect your family from financial hardship and keep the household running smoothly by ensuring that loan payments are made on time, even if you are unable to work due to a disability.

Credit Involuntary Unemployment Insurance (IUI) Benefits

Credit Involuntary Unemployment Insurance (IUI) is designed to pay your loan payments for a specified period of time (and up to the contract limit) if you are involuntarily unemployed. It is a valuable option to protect yourself and your family from the financial fallout of a changing economy.

Benefits of IUI

• IUI makes payments on your credit obligations when you have lost your full-time job through no fault of your own.
• Examples of "involuntary unemployment" include a layoff, general strike, involuntary termination of employment, unionized labor dispute, or a lockout.
• IUI benefits pay up to a pre-determined maximum number of monthly payments on your loan if you become involuntarily unemployed.
• IUI frees up your severance pay or unemployment benefits to handle other household necessities.
• IUI helps protect your family's security and credit rating by ensuring your loan will not end up in default in the event you are involuntarily unemployed.
• IUI reduces your financial burden at an already difficult time.
• IUI has reasonable premiums. Rates vary from state to state and the actual cost of your particular coverage depends on where you live, your loan amount, and the coverage selected.
• IUI has simplified eligibility. Age restrictions may vary from state to state; however, you can usually obtain Credit IUI up to the age of 65.
• IUI has no obligation for 30 days. When you apply for Credit IUI, you have 30 days following receipt of your insurance certificate to review your Credit IUI plan and make sure it meets your expectations. If, during this period, you decide you don’t want the coverage, you can cancel it without obligation and any premiums paid will be refunded.

Non-Credit Insurance

OneMain Financial offers personal and auto loans ranging from $1,500 to $20,000. These loans do not affect your credit score and offer fixed payments and clear, upfront terms.

OneMain Financial also offers credit insurance, which is a type of insurance policy purchased by a borrower that pays off one or more existing debts in the event of death, disability, or unemployment. Credit insurance is optional and may be unnecessary if you have sufficient coverage from other insurance policies.

There are three types of credit insurance:

• Credit Life Insurance: This type of insurance pays off all outstanding loans and debts in the event of the borrower's death, allowing money from other life insurance policies to be used for final expenses, school tuition, or other household necessities.
• Credit Disability Insurance: Also known as accident and health insurance, this insurance pays a monthly benefit directly to the lender, equal to the loan's minimum monthly payment, if the borrower becomes disabled.
• Credit Unemployment Insurance: This insurance pays a monthly benefit directly to the lender, equal to the loan's minimum monthly payment, if the borrower becomes involuntarily unemployed.

Credit insurance can provide peace of mind during tough economic times, but it is important to read the fine print and compare costs and benefits with other insurance options.

Credit Insurance

There are three types of credit insurance:

• Credit Life Insurance: This type of insurance pays off all outstanding loans and debts if the borrower dies.
• Credit Disability Insurance: This type of insurance, also called accident and health insurance, pays a monthly benefit directly to the lender equal to the loan's minimum monthly payment if the borrower becomes disabled.
• Credit Unemployment Insurance: This type of insurance pays a monthly benefit directly to the lender equal to the loan's minimum monthly payment if the borrower becomes involuntarily unemployed.

Before purchasing credit insurance, it is important to consider the following:

• Do you have other insurance or assets that would cover debt obligations in the event of death, disability, or unemployment?
• Would it be more cost-effective to buy a separate life insurance policy or disability insurance policy?
• Will the credit insurance cover the full term of the loan and the entire balance?
• What are the waiting periods for benefits to be paid, and what exclusions or limitations are there?
• Can the insurance company or lender cancel the insurance or change the terms or premiums without consent?

Frequently asked questions