Credit insurance is an additional payment made on top of your regular monthly payments, which can be claimed if you lose your job or have some serious financial troubles during the loan term. In essence, this type of insurance helps cover missed installments if something unexpected happens to you, which causes a temporary decrease in income or loss in employment.
Credit insurance is a great way to protect your credit rating against damage caused by specific events. These events include job loss, accident, or illness that prevents you from working for some time and death.
While these may not seem like very likely events, they do happen regularly, and if any one of those were to happen to you at the same time as having some unpaid bills, such as credit cards or personal loans, it could cause serious problems with your credit rating and score. Having good credit insurance will protect against this risk and help your credit rating remain in good condition.