So How Does Understanding Credit Life Insurance Prevent Wasteful Spending On Mass Advertising?

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So How Does Understanding Credit Life Insurance Prevent Wasteful Spending On Mass Advertising?

Entrepreneur are you currently familiar with the term “credit life Insurance” and or just plain “credit life” for short? It’s really no biggie if you’re not.

However, if you’ve ever borrowed any fairly significant amount of  money , ( say) $1,000 dollars (or more) from any type of traditional lending institutions of any kind.

Such as a bank, credit union and or from a recognized credit card lender etc. Then you no doubt are probably already at least semi remotely familiar with this particular type of debt resolving Insurance product. Typically, whenever you’re financing something that usually (but not always), costs at least $1,000 dollars or more.

Things like maybe  a car, your house, fancy electronic appliances of some kind. Or some really expensive furniture, like that (to die for) Master deluxe bedroom set etc. And you’re borrowing a few bucks and financing it over time, in order to do so.

The lender in question, often times will offer “what’s” sometimes affectionately referred to as a “piece of mind” credit life Insurance policy of some kind.

And basically, without going too far down that particular rabbit hole. Here’s the overall point: (or so the lender claims), is their reasoning for offering/selling it to you/us.

In the untimely event of your (that being) the borrower’s untimely death and or severely crippling disability of some kind. And for whatever reasons,  you can no longer afford to meet your debt repayment obligations. For this particular loan only!

Provided of course, that at the time of your (untimely) disability and or death, your Insurance coverage payments are current, this product pays off any unpaid debt balance, to the lender, that in reality is the beneficiary of the policy and not your relatives and or loved ones, as would be the case in a typical life Insurance type of policy.

Pretty neat, right? Well, may be, but in the spirit of doing our “due diligence”, let’s have an even closer look, just the same! What da ya say?

So How The Heck Does Understanding How A Typical Credit Life Insurance Policy Works Help You Avoid Wasting A Fortune On Traditional Mass Advertising?

Now first of all, (in the spirit) of full disclosure here: ladies & gentlemen (and fellow) entrepreneurs, I am not a licensed Insurance agent and or licensed certified financial planner of any kind! Nor do I currently play one on TV!

(Although, recently, I did stay at a “Holiday Inn Motel!” Remember that outrageously funny ad campaign, Holiday Inn used to use in it’s national radio & TV ad campaigns, a few years back?) You younger eyeballs just skip it, if it doesn’t immediately ring a bell! Anyway…

Please do not (under) any particular circumstances whatsoever, misconstrue what you’re about to read here as (my) attempting to play an attorney nor any other licensed professional of any kind. This is merely one man’s humble opinion.

That said; there are a few really subtle distinctions that you need to be crystal clear that you truly understand about “how” this credit life Insurance ( decreasing debt reduction) financial product really works, before we can get to the main course meal.

First of all, let’s say you purchased a really nice car that cost $35,000 dollars and you initially put $5K down in cash and you financed the remaining $30,000 dollars (over) the typical five year period (and or) next 60 months. (12 monthly payments per year x 5 years = a grand total of 60 monthly payments.)

And the lender points out, that should your untimely death and or a major disability befall you, for just X amount of dollars more per month. This credit life Insurance policy, (provided) your coverage payments are current, at the time of the mishap!

So Called Credit Life Insurance Actually Only Benefits The Lender In Question And Not Your Loved Ones And Or Beneficiaries!

It will automatically kick in and satisfy any unpaid debt balance! Entrepreneur, did you catch that very first subtlety? Meaning; let’s say with just $3,200 more dollars to go on your unpaid car loan  balance, a debilitating accident befalls you! This coverage would only pay off the remaining $3,200 dollar current unpaid loan balance, not the original $30,000 loan balance, that was outstanding when you initially started paying on the policy! Say what? Yep!

Next, did you notice that you weren’t asked to take any type of medical exams, in order to qualify for it? Cool right? Entrepreneur, that’s because you’re not actually purchasing traditional life Insurance coverage!

You’re actually purchasing a sort of hybrid form of decreasing term, debt reduction Insurance product. And lastly, (as was) previously mentioned.

Unlike a traditional life Insurance policy of some kind, (whether it be term life Insurance and or a whole life Insurance policy of some kind), where you’d name your particular beneficiaries, that would receive the Insurance policy proceeds (cash), in the event of your untimely death.

Here, (did you) happen to notice, the lender is the actual legal beneficiary of the policy, because what you’re actually insuring is the unpaid loan balance of the asset, not your life!

Now that we’ve pretty much covered the basics. Within a few remaining issues here and there. Now (finally) we can get to the really good stuff!

The Devils Always In The Details! (Don’t You Agree?)

First of all, while this sort of coverage would most certainly make sense for a married (and or) co – cohabiting couple, that has kids and were paying off their primary residence ( house) and or investment properties etc.

Here’s the rub. So (please) stay with me here. Believe it or not, (according to) some very reliable sources, a staggering 30% of these policies that are sold annually, they’re actually sold to men & women (alike) that absolutely have no spouse, significant other and or kids of any kind! Say what?

So when you die, what the heck does a single person with no spouse, significant other and or kids of any kind, care if some unpaid debt balance, doesn’t get paid? Entrepreneur, once you’re dead, what the heck are you gonna do with a car and or house anyway?

(Note: Donating it to their religious institution of your choice, is a a whole different matter and simply doesn’t apply here, so please don’t go there!)

So What The Heck Does Any Of This Have To Do With Saving A Fortune On Traditional Mass Advertising Campaigns?

Basically, the savvy Insurance companies and these lenders in question, have found a neat little way to pocket a fortune on non essential coverage! And please!

If you happen to sell this and or a similar product, no nasty emails and or negative comments to the contrary! But whether or not, you agree with my personal assessment, of this particular product or not!

What the heck does knowing and understanding “how” it basically works, help you avoid spending a fortune on traditional mass advertising campaigns of any kind? So glad you finally asked?

Basically, any time you advertise in an un targeted mass market medium, like one of the most highly circulated local newspapers in your particular local area, (and the same) holds true for your local TV ad campaigns as well!

Ladies & gentlemen, (so sad) to have to be the one to break the bad news!

You are literally paying a fortune for a ton of non qualified, non interested, extra eyeballs, that have absolutely no interest in your products and or services! And (truth told), probably never will!

But they just happen to be readers of that particular local newspaper and or they happen to watch certain programming, on the station you chose to advertise on! Bingo! What a waste! Don’t you agree?

You’d probably do so much better paying for advertising, using classified and or solo ads in a targeted on or offline publication, that caters to your specific target audience and or niche! What da ya think?

So that’s how understanding “how” a typical credit life Insurance policy, helps you avoid spending a fortune on traditional mass advertising! Any questions?

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