There are some distinct differences when it comes to credit disability insurance vs. debt cancellation policies. A credit disability insurance policy is an agreement between three parties: a borrower, an insurance company, and a lender. Debt cancellation policies involve only a borrower and a lender. These policies are regulated by the lender, not by individual state departments that regulate insurance. Regardless of which type of insurance you carry, it is important to seek experienced legal advice to protect your right to payment.
At the law office of Jonathan M. Feigenbaum, Esquire, our Denied insurance claims lawyer handles initial claim applications and denied claims appeals for individuals who have purchased credit disability insurance or a debt cancellation policy from their lender, or third-party provider.
Credit Disability Insurance
Banks and credit card companies offer credit disability insurance that should protect you if you are unable to work due to an illness or an injury, and have difficulty making your credit card or mortgage payments. This type of insurance typically involves a monthly fee and has a limited maximum payment length of 12 to 24 months. The main features of this type of plan include:
- A three-party contract
- A contract that is subject to state insurance regulations
- An insurance license that is held by the insurance provider
- A contract that is not considered to be part of the initial loan agreement
Debt Cancellation Policies
Debt cancellation policies, or debt cancellation programs, tend to be highly selective in what they cover. Many policy terms do not apply to those who are 65 or older, have a pre-existing condition or are disabled for 14 days or less. In addition, under most policies the lender does not have to eliminate the entire debt. Instead, they may only cancel a set amount or a percentage of the debt. Some of the common features of this plan include:
- A two-party contract
- A contract that is regulated by the lender
- No insurance license required to sell this type of policy
- The contract may be considered to be part of the initial loan agreement
Working to Protect Your Rights
Unfortunately, many people who make a claim under these types of credit disability or debt cancellation policies often find their claims denied. There may be any number of bad faith insurance practices used by banks and credit card companies in order to deny a claim. Attorney Jonathan M. Feigenbaum can help protect your rights and explore your options when trying to collect on a claim under these policies.
For Long-Term Disability Help, Contact Our Denied Insurance Claims Lawyer
If you are struggling to collect a claim for a long-term disability, we are prepared to help. Contact our Denied insurance claims lawyer online or call 617-357-9700, or toll-free at 866-396-9722, to schedule an appointment to discuss your situation.