A Securian Financial study finds most Americans value loan payment protection, yet only 22% have bought it.
Half of American borrowers say they could sustain loan payments for three months or less after a job loss. This is according to Securian Financial's third annual lending environment study, released June 2026. Nearly one in five – 19% – could not last a single month.
The survey of 1,003 current and prospective borrowers, fielded April 2–16, 2026, arrives as household debt has climbed to $18.8 trillion.
The Federal Reserve Bank of New York reported in February 2026 that aggregate delinquency worsened in Q4 2025, with 4.8% of outstanding debt in some stage of delinquency.
Separately, TransUnion's Q1 2026 Credit Industry Insights Report confirmed the US credit market is splitting along a K-shaped path. Non-prime households are facing increasing strain from rising expenses and growing debt.
Only 22% of borrowers said they had purchased a loan payment protection product from their lender. These products – which include credit life insurance, credit disability insurance, and credit unemployment insurance – cover monthly payments if a borrower loses their job, becomes disabled, or dies.
Among all respondents, 77% said loan payment protection provides helpful financial security. Another 74% said it can help people stay on track financially. Yet nearly half – 48% – believe it is primarily a way for lenders to make money. One in three called it a "junk fee."
That skepticism has a documented history. Between 2012 and 2015, the Consumer Financial Protection Bureau (CFPB) took enforcement action against multiple major lenders over the marketing of debt protection and credit card add-on products.
In one 2013 supervisory action, the CFPB found Citibank had deceptively marketed debt protection and credit monitoring add-on products, resulting in a $35 million civil money penalty.
In a separate action, Chase Bank was ordered to refund an estimated $309 million to more than 2.1 million customers for unfair billing practices related to credit card add-on products.
Those actions shaped consumer distrust of the product category for over a decade. Under the current administration, the CFPB has scaled back its enforcement activity, creating a different regulatory environment for lenders.
For carriers and brokers distributing these products through banks and credit unions, reduced federal scrutiny may lower the compliance barrier to more active marketing. But the trust deficit the CFPB's earlier actions helped create will not self-correct.
Alexia Johnson, Securian Financial's partner development leader for Affinity Solutions-US, framed the core problem plainly.
"Borrowers are focused less on getting ahead and more on protecting themselves from setbacks," she said. "That creates both a challenge and an opportunity for financial institutions to strengthen trust."
The study found borrowers judge lenders not on disclosures, but on hardship behavior. Among respondents, 85% said their trust in a lender would increase if loan payment protection helped cover payments during a hardship. Another 90% said they would likely stay with that institution long term.
The cost of the product (52%), clear explanations of how it works (40%), and coverage details (38%) were the top factors shaping trust.
Gen Z borrowers were the most likely to purchase loan payment protection at 31% and the most familiar with it. But they were also the most likely to find the products confusing.
Baby Boomers were the least likely to purchase (15%) and the most skeptical – 51% said these products primarily serve lenders.
TransUnion's Q1 2026 data shows the super prime population has grown by roughly 15 million consumers since 2019. It now surpasses 40% of the credit-active population, while subprime and non-prime borrowers face tightening conditions. Loan payment protection is designed precisely for that non-prime and middle-market segment – the group least likely to buy it, and most likely to need it.
For brokers and carriers active in credit insurance and protection products, the study's findings point to a communication failure rather than a product failure. Securian identified several priorities for lenders:
The biggest financial concerns reported by borrowers:
The widening insurance protection gap these figures reflect is not unique to this product category. A similar pattern of high perceived value and low take-up has been documented across other consumer insurance products. For that audience, the product exists. The case for it has not yet been made in a way they believe.
Read Securian Financial's full study findings on the barriers stalling payment protection adoption.
