Yes, if at time of application, the amount of the Insurance Coverage for which the customer has enrolled in is less than the approved loan or lease payment amount, a percentage of coverage is calculated, and the amount of the insurance benefit will be reduced proportionately. The Insurance Premium is based on the requested insurance coverage amount of the Loan/Lease and the benefit paid at time of claim is pro-rated.
Example:
- Original Loan or Lease Amount $20,000
- Insurance Coverage Amount (At point of sale): $10,000 (50% of the loan)
- Outstanding Balance at time of death: $5,000
- Benefit payable at Time of Claim: $2,500 ($5,000 x 50%)