If applying for a personal line of credit, credit card,or mortgage, talk to your lender about payment protection insurance. This insurance is an optional benefit available on many loans, and it protects the borrower in the event of loan default.


Unforeseen occurrences can arise, wherein borrowers are unable to make their monthly loan payment. A common cause of loan default is disability or death. Unfortunately, death or disability doesn’t excuse a borrower from a debt – unless they have payment protection insurance. The main objective is to protect the borrower’s credit rating, or reduce the financial burden on their family.

Payment protection insurance offers affordable monthly premiums, and this amount is based on the loan balance, your state, and the chosen coverage. Additionally, premium payments are included within the monthly loan payment. This feature is convenient and simple. You won’t have to write an extra bill each month.

Borrowers can apply for payment protection insurance at the time of application. In most instances, supplement insurance isn’t a loan requirement. However, on rare cases a lender might require this insurance as collateral for a loan or line of credit. If so, the borrower is free to choose their own payment protection insurance provider.