When Helen Agnew bought debt protection that would cancel her car payments if she lost her job, she had no idea how valuable the protection would be.
Debt protection is a suite of products available to consumers through creditors. Creditors offer the products to help borrowers cover their payments when unforeseen events occur such as job loss, disability, property damage, or death. Protection is generally available for auto purchases or loans, secured or unsecured loans, credit cards, and home equity loans. A consumer’s decision to undertake a new indebtedness changes the consumer’s financial exposure. Debt protection products not only help consumers protect that new risk, they foster financial well-being and peace of mind.
“My credit union offered debt protection to me when I financed my car and my daughter’s car there,” Helen says. “It seemed like the smart, responsible thing to do. Purchasing that debt protection turned about to be the best decision I’ve ever made.”
Helen had moved recently to Missouri with her college-age daughter after a divorce left Helen single after more than 20 years. She was ready for a new life. And then it happened, a bolt from the blue. Helen suffered a debilitating stroke. As she relearned how to walk and talk, something else unexpected happened. After 31 years in the workforce, Helen became unemployed. But Helen didn’t panic.
“I knew I had safety net,” Helen says. “The debt protection I bought from my credit union was a small fraction of my loan amount. But when I lost my job, I didn’t have to decide if I had to make my house payment or stay current with my car loan.”
These financial protection products are most often obtained at the time of purchase or through a financial institution like a bank or credit union.
“Without debt protection on my car loans, we would have had to put our lives on hold,” Helen says. “I wouldn’t have had a car I could use to get to my new job. My daughter wouldn’t have had the transportation she needed to continue her college studies. I am so thankful I took advantage of debt protection when it was offered to me. It was integral part of the toolbox that carried through the most difficult time in my life.”
“The use of debt protection ensures that both assets like cars and the financial well-being of the consumer are protected,” said Tom Keepers, Executive Director and Executive Vice President of the Consumer Credit Industry Association (CCIA), whose members provide financial protection products to approximately 20 percent of U.S. adults. “The chief goal of CCIA’s members is to provide insurance and assurance products that contribute to a thoughtful, balanced approach by consumers to protect their personal financial well-being. As consumers make their major expenditures during 2017, we encourage them to learn more about and use our members’ financial protection products, which provide them and their families with significant benefits.”