In addition to covering auto payments and other types of loan payments, there are more specific types of loan protection insurance, including:
Guaranteed asset protection
Guaranteed asset protection, or GAP insurance, protects your auto loan in the event of an accident. After you initially purchase a vehicle, the value drops. Since the actual value is what your auto insurance pays, the GAP policy will take care of the difference. These types of policies are generally recommended for those who buy a brand new car, since the cash value automatically decreases the moment that the car is driven off the lot. However, some insurers provide guaranteed replacement cost policies for brand new cars, normally with the guideline that the insurance is available for 12,000 miles or the first year, whichever comes first. If your insurance automatically comes with this extra coverage, it won’t be necessary to purchase additional GAP insurance.
Accidental death and dismemberment
Accidental death and dismemberment, or AD&D coverage, can be beneficial for those in a single income household, as it will pay off debts in the event that the borrower accidentally becomes disabled, sick, or passes away. This helps safeguard certain assets, such as your home. This type of policy is also recommended for any family that has one working head of household who is considered the breadwinner and makes much more than others in the household.
Depending on your financial situation and other aspects of your life, loan protection insurance can be extremely beneficial and worth the initial investment. There’s never a way to know what could happen in the future, and these types of policies can help to protect you and your family in the event of an emergency or unforeseen event. Be sure to compare different offers and find not only the best product out there for you and your family, but for the best price possible.
Whether you need money to take care of bills or extra cash to make a purchase, Peachtree Settlement Funding can help.. At Peachtree, we buy future payments from those who are recipients of annuity and structured settlement payment streams, but decide they need more (or all) of their money upfront. If you’d like to learn how you can turn those smaller, periodic payments into a lump sum payout, contact us today!
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.