Debt Protection is a lender product that is typically fully insured and administered by an insurance company. Debt Protection plans provide for cancellation or suspension of loan payments upon occurrence of certain events involving a borrower including:
Death
Disability
Unemployment
Family Leave
Debt Protection plans give a lender greater design and pricing flexibility compared to traditional credit insurance. Following are some of the advantages of Debt Protection versus traditional credit insurance:
· Debt Protection programs are not subject to state credit insurance regulations.
· Debt Protection retail pricing is determined by the lender.
· Debt Protection offers the lender flexibility in plan design.
· Debt Protection has no licensing requirements for employees of the lender.
Debt Protection programs typically do not vary in design or pricing when multiple states are involved