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If you have ever had a loan or credit card you may have paid junk insurance and be entitled to thousands.
If you have ever taken out a personal loan, car loan, home loan or credit card, you may have been sold consumer credit insurance (CCI).
CCI is a form of add-on insurance that is meant to protect you if something happens and you can’t afford the repayments.
The cover is designed to protect you in unexpected events such as:
The CCI premium, the amount and length of cover are tied to the loan, with each policy having different features, limits and exclusions. Any claim pay-out varies greatly between policies depending on these features, limits and exclusions. For example, a claim for involuntary unemployment under a policy will pay the minimum monthly loan repayment each month from the date of unemployment but the claim payments may be capped at a specified (monthly and overall) limit amount and payments will only be available for a limited period of time.
Key details of the policy such as the term, costs, limitations, exclusions can found in the Policy Schedule or Product Disclosure Statement which should have been provided when loan or credit card was sold.
Consumer Credit Insurance is a type of insurance that helps protect consumers from financial loss if they are unable to make payments on their credit accounts due to certain covered events. These events can include loss of life, disability, or involuntary unemployment. The insurance is typically offered to consumers at the time they take out a loan or open a credit account, such as a credit card or line of credit.
The benefits of Consumer Credit Insurance include providing coverage for the outstanding balance on a credit account in the event of a covered loss, and potentially helping to prevent delinquency or default on the account. It also offers a peace of mind for consumers, as they know that their loved ones will not be left with the burden of paying off their credit accounts in the event of their death or disability.
There are different types of Consumer Credit Insurance, each with its own terms and conditions. Some policies may only cover certain types of credit accounts, such as mortgages or personal loans, while others may cover all types of credit accounts. Some policies may only cover certain types of loss, such as death or disability, while others may cover a wider range of events, such as involuntary unemployment.
The cost of Consumer Credit Insurance varies depending on the type of policy and the amount of coverage. Typically, the cost is added to the consumer’s monthly credit account payment, and the consumer pays for the coverage over the life of the loan or credit account. It is important for consumers to read the terms and conditions of the policy carefully, to understand the exclusions and limitations, and to compare the cost and coverage of different policies before purchasing.
Consumer Credit Insurance policies can be purchased separately or as part of a package, along with other types of insurance such as home, auto, and life insurance. These bundled policies can offer a more comprehensive coverage at a lower cost, but again, it’s important to read the terms and conditions carefully, to understand the exclusions and limitations, and to compare the cost and coverage of different policies before purchasing.
However, Consumer Credit Insurance is not always necessary, and it is important for consumers to carefully consider whether the coverage is worth the cost. In many cases, consumers may already have adequate coverage through their homeowners, auto, or life insurance policies, or through their employer’s benefits plan.
It is also important for consumers to be aware that Consumer Credit Insurance is not always required by lenders. Many lenders will allow consumers to opt out of the coverage if they choose. Also, some lenders may offer consumer credit insurance as a default option, so it is important for consumers to read the terms and conditions of their credit account carefully to determine whether consumer credit insurance is included and whether they have the option to opt out.
In conclusion, Consumer Credit Insurance is a type of insurance that can help protect consumers from financial loss if they are unable to make payments on their credit accounts due to certain covered events. It can provide peace of mind, but it is important for consumers to carefully consider whether the coverage is necessary and worth the cost, and to read the terms and conditions of the policy carefully before purchasing. Additionally, it is worth noting that Consumer Credit Insurance is not always required by the lender, and consumers have the right to opt out of it.
Claimo offers a service to help check your documents or request relevant paperwork for free.
Consumer credit insurance is often considered as “junk” insurance.
Here are some of the problems we see:
The Australian Securities and Investments Commission (ASIC) report 622, titled “Consumer credit insurance: Poor value products and harmful sales practices,” is a comprehensive examination of the consumer credit insurance (CCI) market in Australia. The report, which was released in July 2017, found that CCI products were often sold to consumers at the point of sale of loans and credit cards, and that these products were of poor value and had high costs.
The report states that CCI products, which are intended to provide financial protection for consumers in the event of death, incapacity, or unemployment, were often sold to consumers who did not need or want them. Furthermore, the sales practices used by some lenders and intermediaries were found to be harmful to consumers, as they were often given incorrect or misleading information about the products.
The report also found that many consumers were paying for CCI products without fully understanding the terms and conditions, and that the products were often sold without proper consideration of the consumer’s individual needs and circumstances. Additionally, the report found that consumers were often charged for CCI products without their knowledge or consent, and that the products were often sold to consumers who were not eligible to claim under the policy.
The ASIC report 622 recommends that the industry should improve the value of CCI products, improve the way they are sold and marketed to consumers, and increase transparency and disclosure for consumers. The report also states that consumers should be given the right to cancel CCI policies within a certain period, and that consumers should be provided with clear and accurate information about the products they are purchasing.
In conclusion, the report highlights that CCI products were poor value to consumers and the sales practices used were harmful to consumers, it recommend the industry to improve the value of the products and the way they are sold, and to increase transparency and disclosure for consumers.
CCI can be difficult to find, however, these are the main places to check:
You can reclaim your CCI if you’re eligible with the help of the team at Claimo. If you have purchased consumer credit insurance, you may be entitled to a full refund of all the costs. This can often be thousands of dollars in compensation.
Claimo can help you establish your claim on a completely No Win No Fee basis which means that if we are not successful, you don’t have to pay anything.
Claimo offers a service to help check your documents or request relevant paperwork. If insurance is located we submit a refund request on a no win no fee basis on eligible claims.
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