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Delaware Department of
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Credit Insurance


What is Credit Insurance?

The most commonly sold credit insurance is referred to as credit life or credit accident and health (or disability) insurance. Credit life insurance pays in the event of the debtor’s death. Credit accident & health (or disability) insurance cover loan payments due while the debtor is ill or disabled.

Credit life insurance may be purchased by itself or in a combination policy also providing credit accident and health (or disability) coverage. Credit accident or health (or disability) insurance is not available except in combination with credit life coverage.

Credit Life and Credit Accident & Health Insurance is frequently offered to consumers financing the purchasing of an automobile. The purchase of credit life and credit accident & health insurance is strictly optional. A lender may not refuse to give a consumer the loan simply because the consumer declines to purchase credit life and credit accident & health insurance.

Important Consumer Protection

In 1996, the General Assembly passed a new law to create new protections for credit insurance consumers. The Delaware Consumer Protection Act mandates pre-purchase disclosures to give consumers more information and greater control over their insurance decisions. Under the new law, loan officers/insurance agents must provide prospective purchasers of credit insurance with the following information:

  • The purchase of consumer credit insurance is optional.
  • Any restrictions upon eligibility of coverage must be fully disclosed.
  • A brief description of the coverage must be provided.
  • Credit insurance policies come with a 30 day “free look.” Up to 30 days after signing the contract, consumers can still cancel the policy and are entitled to a full refund of any premiums paid.

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