Credit insurance covers your loan or credit card payments in the event you become unable to pay due to a financial shock like unemployment, disability or death.Manyoralloftheproductsfeaturedherearefromourpartnerswhocompensateus.Thismayinfluencewhichproductswewriteaboutandwhereandhowtheproductappearsonapage.However,thisdoesnotinfluenceourevaluations.Ouropinionsareourown.Hereisalistofourpartnersandhere'showwemakemoney.Creditinsurancecoversyourloanorcreditcardpaymentsintheeventyoubecomeunabletopayduetoafinancialshocklikeunemployment,disabilityordeath.Thoughitsoundslikelifeinsuranceordisabilityinsurance,thereisakeydifference:Creditinsurancedoesnotpayyouanything;instead,itonlyensuresthatthelendercontinuestoreceivepayments.Bydoingso,itmayprotectyourcredit.Youcannotbeforcedtobuyalender’screditinsurance.Lendersmayofferyoutheoptiontobuycreditinsurancewhenyou’reapplyingforanautoloan orautoequityloan,an unsecuredinstallmentloanorasubprimecreditcard.Banksandcreditunionsmayalsoofferthisoptionwiththeirloans.Creditinsuranceisalsocalled“paymentprotectioninsurance,”or“creditprotection.”A“voluntarydebtcancellationaddendum”workssimilarly;alltheseproductsensurethelenderreceivespaymentsifyouareunabletomakethem.NerdWalletdoesnotrecommendtakingcreditinsuranceifyoualreadyhaveatraditionallifeorhealthinsurancepolicythatwillcoveryourobligationswhensomethinggoeswrong.ResearchbyconsumeradvocacygroupssuchastheCenterforEconomicJusticeandtheNationalConsumerLawCenterhasshownthatcreditinsurancepremiumsaretypicallymoreexpensivethantraditionalinsurance,andpayoutsaresmallerwhenclaimsarefiled.TypesofcreditinsuranceTherearefivemajortypesofcreditinsurancecoverage:Creditlife:Makestheremainingloanpaymentstothelenderintheeventofyourdeath.Creditinvoluntaryunemployment:Makesalimitednumberofmonthlypaymentstothelenderifyouloseyourjobthroughnofaultofyourown.Creditdisability(alsoknownascreditaccidentandhealthinsurance):Makesalimitednumberofmonthlypaymentstothelenderifyoubecomedisabled.Creditpersonalproperty:Common