They also know their best market-- the insurance ingenue, a relative newcomer to questions of family security. Says Ray LuBien, senior vice president of Security Pacific Insurance Services in San Diego, "It's going to appeal most to someone who doesn't have a lot of other basic coverage"--most commonly, life insurance.
It might not appeal to that customer either if he considers the alternatives, rarely mentioned by lenders. Credit insurance is tied to specific loans, paying off that obligation alone. The money even goes directly to the creditor: "It doesn't even give your heirs the right to decide what to do with the money," says Hunter, "though they might prefer to keep a $50,000 loan at 8% and do something else with the insurance money."