Credit-related insurance helps you meet your financial obligations in the event of unforeseen circumstances.
Credit-related insurance covers you if you cannot make the repayments on your credit contract or loan because of death, illness, disablement, redundancy or other circumstances that may prevent you from earning the income you need to service the debt.
It can extend to all kinds of consumer loans, including:
- car loans
- finance company loans
- mortgages from banks and other lenders.
The benefits, limitations and costs of this insurance can vary. Always check the policy wording and speak to your insurer if you have any questions.
The Financial Services Federation produces a code to responsible credit-related lending, called the Responsible Credit-Related Insurance Code.
This Code explains different types of credit-related insurance, how a responsible provider should behave, and your obligations as a consumer.