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It is almost always better to insure yourself against income loss or death by purchasing regular life or disability insurance instead of credit insurance. When you finance cars, consumer goods, mobile home sales, and residential mortgages, salespeople may try to sell you four types of credit insurance:

• credit property: insures against damage or loss to whatever item secures the loan

• credit life: pays the loan balance in case of death

• credit disability/accident and health: temporarily makes loan payments in case of accident or ill health

• involuntary loss of income: temporarily makes loan payments if you're laid off

Creditors have an incentive to sell credit insurance because they are the primary beneficiaries. They make money from the sale of insurance and they make money when you pay the insurance premium as part of your loan.

Four common abuses in selling credit insurance are:

• involuntary or pressured sales,

• overcharging,

• incomplete coverage, and

• post-claim ineligibility determination.