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Demystifying Credit Insurance

Have you ever wondered what your business would do in the case of non-paid commercial debts? This is where credit insurance coverage comes in. Credit insurance is a form of protection for a business against debts. The policy allows you to manage trade risks beyond you.

For individuals, a credit insurance cover will pay off your credit card balance in cases of death, unemployment, disability, or damaged property. In simple terms, the credit insurance policy will help you handle financial shock.

Credit policy could save you from a lot of trouble that would have otherwise overtaken you could you not have responded appropriately. It gives you peace of mind so long as the premiums payments are made on time.

Types of Credit Insurance

Both businesses and consumers can use credit insurance. Here are the types available.

Credit life insurance

This type of credit insurance pays off your credit card balance in case of death. It prevents a family crisis where people overburden their families with unfamiliar loans. It protects your estate.

Credit disability insurance

In case you become disabled, this type will clear your credit balances. You may have to wait before they payout, but they do well.

Credit unemployment insurance.

You will get your minimum payment through the insurance after losing your job. If you resign or are fired from the job, you might not enjoy the benefits.

Credit property insurance.

This is used to secure a loan or a property destroyed through accident, theft, or uncontrollable disasters.

Trade credit insurance.
A policy that covers businesses selling goods and services on credit. In the case of insolvency, a company is fully protected.

Why do you need Credit Insurance?

• Guarantees your ability to manage operations.
• Acts as security to financing partners
• Improves your commercial development risks through adequate cash flow.
• Credit insurance increases the time taken to make payment after a sale.

Credit insurance is determined by the debt you are involved in. lenders buy this option in auto loan applications when applying for an auto equity loan or dealing with an unsecured instalment loan.