Often Consumer Credit Insurance (CCI) is not good value for money, and people are left with an insurance plan that they don’t need, or can’t even claim.
There have been so many issues with CCI mis-sells, that from October 5th, 2021, a salesperson will not be allowed to sell you a CCI product until 4 days after your loan has been approved. This will give people more time to research whether a CCI is right for them.
In order to make sure that you don’t end up paying for a product that does not suit your needs, here are a few things that the sales agent might not explain to you when you sign up for CCI.
How much is the benefit under the policy?
When people sign up for CCI, they often end up paying premiums for a product they don’t even need. You want to make sure that the benefit matches the size of your debt. You will also want to make sure you know the total cost of your policy. Some salespeople will only tell you the monthly cost, and will avoid telling you the total cost directly, so that they can make an extra commission.
According to a review conducted by ASIC, only 11 cents was paid for every $1 paid in premiums for CCI with credit cards. For other types of CCI claims, only 19 cents was paid for every $1 that was paid in premiums.
How much of your debt is covered?
It’s important that you are told how much of your debt will be covered in the event that something does happen, and you need to claim through your CCI. Many policies do not cover your full debt, only a small portion of it.
Some policies will only cover a certain percentage of your debt, and will be paid in installments. These installments may also have a time limit to them, and will stop after a certain amount of time has passed. These are all details you should be aware of.
It is important that the salesperson explains to you how much you will be covered for in the event that you do need to make a claim. You should be given all the information necessary in order to make an informed decision regarding whether or not this product is right for you.
What you can claim for
Many people are mis-sold a CCI product that they are not even eligible to claim. It is important that the salesperson explains to you what you can claim form.
Often you can only make an insurance claim for unemployment if it is involuntarily, and there may be conditions that define what employment is i.e. a certain number of working hours a week.
If you already have existing medical conditions, or a disability, you might not be eligible to claim for those reasons.
Some policies will even have exclusions, for if you are self-employed or above a certain age.
Again, these are all things that should have been clearly explained to you before you were sold the CCI.
These are a few things to consider before you sign up for a CCI product, but sometimes the salesperson will make you feel like it is mandatory to buy one, or even sneak it in with other paperwork.
If you have been mis-sold a CCI product, we are here to make your claims process simple and easy. We work on a no-win, no-fee basis. Contact us today to start lodging your claim.