FACTOID # 21: 15% of Army recruits from South Dakota are Native American, which is roughly the same percentage for female Army recruits in the state.
 
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Encyclopedia > Credit insurance

Credit Insurance is an insurance policy associated with a specific loan or line of credit which pays back some or all of any money owed should certain things happen to the borrower, such as death, disability, or unemployment. Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... A loan is a type of debt. ...


The costs (called a "premium") for this are usually charged monthly, depending on the balance owed, and depending on the usage of the loan or line, could almost double the cost of it (on the opposite end of the spectrum, clever usage could avoid having to pay almost any premium at all).


The sale of credit insurance is controversial because it is almost always cheaper for an individual to forgo credit insurance, and instead have a term life insurance or disability insurance policy to cover the credit balance. The reason is that credit insurance is guaranteed issue, no matter if a person would otherwise be insurable or not. So the rates offered must reflect this, and be worse than if a healthy or otherwise insurable person were to purchase coverage on their own. Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owners death. ... This page is a candidate for speedy deletion. ...


In addition, there is an even more controversial practice (called single premium credit insurance), usually associated with the sub prime lending industry, of charging the premium only one time at the beginning of the loan. For example, charging 5,000 dollars at the time of a mortgage refinance, which is usually financed (added to the total loan amount) as part of the loan. This is considered very bad by critics, since doing this is only cheaper if one is sure that one is going to stay with the loan forever and not refinance. Critics contend most people do not realize this and lose money by refinancing once again, thereby losing the benefits of the credit insurance. Subprime lending, also called lending, is the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. ...

Contents

History

Credit Insurance was born at the end of nineteenth century, but it was mostly developed in Western Europe between the first and Second World Wars. Several companies were founded in every country, some of them also managed the political risk to export on behalf of their State. Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ... Ypres, 1917, in the vicinity of the Battle of Passchendaele. ... Mushroom cloud from the nuclear explosion over Nagasaki rising 18 km into the air. ...


Credit Insurance is a term used to describe both Trade Credit Insurance and Credit Life Insurance. Trade Credit Insurance is a risk management product offered by governmental Export Credit Agencies and some private insurance companies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. ...


Credit Life Insurance is a consumer purchase, often sold with a big ticket purchase such as an automobile. The insurance will pay off the loan balance in the event of the death or the disability of the borrower. Although purchased by the consumer/borrower, the benefit payment goes to the company financing the purchase to satisfy a debt.


Trade Credit Insurance is purchased by business entities to insure their accounts receivable from loss due to the insolvency of the debtors. This product is not available to private individuals. Trade Credit Insurance is a risk management product offered by governmental Export Credit Agencies and some private insurance companies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. ...


Over the '90s, a concentration of the Trade Credit Insurance market took place and four big companies became the main players of a market focused on Western Europe, but rapidly expanding towards Eastern Europe, Asia and the Americas.: Trade Credit Insurance is a risk management product offered by governmental Export Credit Agencies and some private insurance companies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. ...

  • Atradius. A merger between NCM and Gerling Kreditversicherung. Later renamed Atradius after it was demerged from the Gerling insurance group.
  • Coface. Formerly a French government sponsored institution established in 1946, this company has now been privatised.
  • Euler Hermes, merger of the two credit insurance companies of the Allianz Group.

// Atradius is a leading credit insurer with total revenues of around EUR 1. ... The Compagnie française dassurance pour le commerce extérieur (COFACE) is the main French export credit agency. ... This page may meet Wikipedias criteria for speedy deletion. ... Allianz Group, with $128 billion of revenue during 2003, is Germanys largest, and one of the worlds largest financial services providers with a focus on the insurance business. ...

Credit Insurance Providers

// Atradius is a leading credit insurer with total revenues of around EUR 1. ... The Compagnie française dassurance pour le commerce extérieur (COFACE) is the main French export credit agency. ... This page may meet Wikipedias criteria for speedy deletion. ...

See also

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... Export Credit Agencies and Investment Insurance Agencies, commonly known as ECAs, are institutions which act as finance companies for private domestic entities who conduct business abroad. ... Political risk insurance can be taken out by businesses, of any size, having operations in countries in which there is a risk that revolution or other political conditions will result in a loss. ... It has been suggested that this article or section be merged with Mortgage. ... Lenders Mortgage Insurance (LMI), also known as Private Mortgage Insurance (PMI), is insurance payable to a lender when taking out a mortgage. ...

External links

  • ICISA - International Credit Insurance & Surety Association
  • Learn About Credit Insurance Insurance history, definitions and types

  Results from FactBites:
 
Brochures: Credit Insurance (1129 words)
It is insurance sold with a credit transaction, such as a loan or credit card, that will pay all or a portion of the outstanding credit balance if a claim is filed, or, if it is credit property insurance, usually pays the lesser of the value of the item or the balance of the loan.
Credit Life Insurance - is similar to a term life insurance policy, however, when a borrower dies the proceeds of the policy are used to pay off all or part of the borrower's debt.
Credit insurance also may not cover balloon payments that are due at the end of a loan.
Credit insurance - Wikipedia, the free encyclopedia (408 words)
Credit Insurance is an insurance policy associated with a specific loan or line of credit which pays back some or all of any monies owed should certain things happen to the borrower, such as death, disability, or unemployment.
The sale of credit insurance is controversial because it is almost always cheaper for an individual to forgo credit insurance, and instead have a term life insurance or disability insurance policy to cover the credit balance.
Credit Insurance was born at the end of nineteenth century, but it was mostly developed in Western Europe between the first and Second World Wars.
  More results at FactBites »

 
 

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