The next time you apply for a loan or a mortgage, the lender may inquire if you are interested in credit insurance. This may prove useful to your future, especially if you have a history of credit problems or foresee potential for requiring a credit consolidation loan. Credit insurance is designed to protect the loan if there may be a reason you cannot make your payments, either because you are ill, can't work or worse yet - die.

There are four times of credit insurance that may prove useful to your credit and keep you from having to take out a credit consolidation loan. Credit life insurance will pay off all or part of your loan if you were to die. Credit disability insurances will pay your loan if you become sick or injured and are unable to work. Involuntary unemployment insurance will pay on your loan in the case of you lose your job due to no fault of your own. Credit property insurance protects personal property that may be used to secure the loan if it is destroyed in a natural disaster or through theft.

There are several options to consider before purchasing credit insurance. You will first need to consider whether or not the rate for the insurance is worth it, as well as your credit protection needs and your options on the insurance coverage. You will also want to consider how much additional debt you have in addition to the loan or mortgage that you are taking out. If you do not have additional debt, then the insurance may be worth it to protect your credit rating. If you do have additional debt, you may find that the insurance is a good policy to have that may keep you from having to take out a credit consolidation loan.

Ask these questions of your lender before taking out the insurance coverage:

* What is the premium?

* Will the premium be financed with the loan and what is the increased payment and additional interest?

* Can you pay monthly rather than financing?

* How much lower would your payment be without insurance?

* Will the insurance cover the full amount of the loan and the length of the loan?

* What are the exclusions and limitations on the payment of benefits?

* Is there a waiting period?

* Can you cancel the insurance and if so, do you receive a refund?

These questions are very important to you and you should get complete answers from the lender. This may be the difference in not having to take out a credit consolidation loan if you were to get into debt problems.