Cincinnati Bankruptcy Attorney

Archive for the ‘Credit insurance’ Category

On 14 February, the Chamber of Commerce and Industry of Madrid has organized a conference, which will give José Manuel Santamaría, regional director Cesce on credit insurance. The meeting will discuss the various figures involved in this insurance, which covers terms and risks in international operations and the different policies offered by insurance companies operating in Spain.

In addition, attendees will be explained the steps that the company has to make to get the benefits that brings credit insurance as risk management tool client.

This is a meeting aimed at import and export companies, international commercial practice which requires optimal management of their operations. Participating companies will have the opportunity to ask specific questions about the problems that usually are usually found in international operations. The price to attend the conference is 106.20 euros (VAT included).

Credit insurance allows borrowers to indemnify themselves in cases of their inability to repay the loan. Credit insurance law regulates the process of issuance and enforcement of credit insurance policies.

Applicability

Credit insurance law, including the definition of credit insurance, is different in every state. The term “credit insurance,” however, normally refers to consumer credit. Common examples of loans for which credit insurance is available are educational, home equity, purchases of home appliances and auto loans.

The definition of credit insurance typically excludes life, accident, health and involuntary unemployment insurance. Some states also allow property credit insurance that protects the property used as collateral to secure a loan.

Borrowers’ Rights

Credit insurance is normally optional. According to the Federal Trade Commission, it is illegal to make a loan approval contingent on the purchase of credit insurance. Including credit insurance in a loan without the borrower’s knowledge and consent is also against the law.

Regulations

The aspects of credit insurance commonly regulated by state laws include the amount and cost of the policy, its duration, limitations on penalties and standards for disclosure, claims handling and enforcement.

Credit insurance protects the lender if the borrower cannot pay off a loan. According to the Federal Trade Commission, credit insurance is usually an optional purchase. Some banks will require credit insurance if the loan request appears risky. The borrower’s purchase of credit insurance may convince the lender to offer better terms, such as a lower interest rate or a smaller down payment.

Alternatives

Other types of insurance can cover the same negative events that credit insurance protects against. Life insurance provides a payment on the user’s death, and disability insurance pays out money if a worker is injured. According to the Federal Citizen Information Center, a person who is considering purchasing credit insurance should check the prices of other types of insurance that cover the same types of losses.

Requirements

There are several different types of credit insurance. According to the state of Wisconsin, the types of credit insurance that are available include life insurance, disability insurance, unemployment insurance and property insurance. Lenders may not require the first three types of insurance before offering the loan, but a bank can require a borrower to purchase credit property insurance.

Credit property insurance applies directly to losses or damage to the item the borrower purchases with the loan, and the other types of insurance pay off the loan if the borrower can no longer work.

Cancellation

Prospective borrowers should check to see if there is an option to cancel the credit insurance after certain conditions are met. A lender may require various types of credit insurance if the borrower does not make a sufficient down payment on the loan. After the borrower pays off enough of the loan principal, the borrower may be able to cancel the credit insurance and reduce monthly payments on the loan. Read the rest of this entry »