All three of these terms describe the manner in which a credit disability premium is calculated for a specific loan.

 

Single Premium - Calculates the premium through a set of rates that correspond to the Original Term of the loan. The premium amount assumes insurance coverage for the full term. This premium is added up front to the loan balance when the loan is created, hence "Single Premium". If the loan is paid in full early, the borrower is entitled to a refund for the time between the pay-off date and the original maturity of the loan.

 

Level Rate - Calculates premiums with a simple math calculation of a dollar amount for each $1000 of the loan balance. This amount is added to the loan balance monthly. The loan term is not used. Because it is using only one rate, the term "level rate" accurately describes this calculation. Level Rate calculations are also used for Credit Life Insurance.

 

Monthly Renewable - Calculates premiums using a set of rates that correspond to the Original Term, Balance, rate and payment to calculate the Remaining Term of the loan. These premiums are also added monthly to the loan.  The term "Monthly Renewable" is used because the loan is "re-amortized" for the premium calculation.

 

Each state governs what calculations can be used for specific types of loans. CU*BASE supports a wide range of calculation parameters that may be included such as Maximum Loan Term/Maximum Insurance Term, etc.

 

In addition to the normal Single Disability, Single Life and Joint Life, we also support Joint Disability, Age-Rated Life and non-Level Rate life calculations.

 

Note* -All  Debt Protection coverages are based on the Level Rate calculation.