Hassle-Free Health Coverage: Credit Health Coverage

Not all forms of group health insurance are cost effective. Credit health insurance is usually written as a group disability income contract although it could also be an individual policy. The purpose of credit health is to provide payment of your debt if you are disabled due to accident or sickness.

The creditor is the policyowner. Disability benefits equal to your debt are paid directly to the creditor in the event that you become disabled. These benefits are usually paid on a monthly basis as long as the debt remains and you are sick.

By most reckoning, credit health coverage -- even purchased on a group basis -- is not a very cost-effective kind of insurance.