This should be an extremely easy one - On the Credit Insurance Disclosure section on the TIL Form - shouldn't the Premium and Term be loan totals, rather than a monthly figure and "1 month" for the Term? Or is a monthly figure allowed? 226.4(d) seemed to say it is a total so the consumer can see how long the insurance runs for, which may or may not coincide with the loan term.

You are correct. You must show the entire amount (premium) subject to a few exceptions. I like to say you can't use the Sally Struthers method [only $0.75 a day vs. saying it costs 273.75 (.75 x 365)]. Rather be truthful and disclose the entire cost. Here's what the regulation has to say about it:

12 CFR §226.4 Finance charge.
(ii) If the coverage is obtained from or through the creditor, the premium for the initial term of insurance coverage shall be disclosed. If the term of insurance is less than the term of the transaction, the term of insurance shall also be disclosed. The premium may be disclosed on a unit-cost basis only in open-end credit transactions, closed-end credit transactions by mail or telephone under §226.17(g), and certain closed-end credit transactions involving an insurance plan that limits the total amount of indebtedness subject to coverage.

Commentary to 12 CFR §226.4 Finance charge.
4. Unit-cost disclosures. i. Open-end credit. The premium or fee for insurance or debt cancellation for the initial term of coverage may be disclosed on a unit-cost basis in open-end credit transactions. The cost per unit should be based on the initial term of coverage, unless one of the options under comment 4(d)-12 is available.

ii. Closed-end credit. One of the transactions for which unit-cost disclosures (such as 50 cents per year for each $100 of the amount financed) may be used in place of the total insurance premium involves a particular kind of insurance plan. For example, a consumer with a current indebtedness of $8,000 is covered by a plan of credit life insurance coverage with a maximum of $10,000. The consumer requests an additional $4,000 loan to be covered by the same insurance plan. Since the $4,000 loan exceeds, in part, the maximum amount of indebtedness that can be covered by the plan, the creditor may properly give the insurance cost disclosures on the $4,000 loan on a unit-cost basis.

Dave, in your line of work (you are a consultant aren't you?) have you come across many national banks going to debt cancellation coverage in replacement of single premium credit insurance? If so, is the disclosure applicable?

Thanks. It seems that some lenders/processors who'd have their druthers would opt for "Sally Struthers."

Dean: I do not see debt cancellation insurance very often. Yes, I am a consultant.

Chris: I see it time and time again, but the Struthers method is not acceptable.

You're going to see a lot more debt cancellation products after 10/1 when the single premium kicks you over into Section 32 territory.

The changes to HOEPA require not just that single premium credit insurance be included in the fee test. Any debt cancellation premium paid at or before closing must also be included in the Fee Test.

Some credit insurers offer monthly credit insurance (this is very common in the credit union industry). Premiums for this type of insurance are paid monthly by adding the premium to the outstanding loan balance. The commentary explains that if the initial term of the insurance is indefinite or not clear, or the consumer has agreed to pay a premium periodically but is under no obligation to continue the coverage after making the initial payment that the creditor can disclose the cost on the basis of one year of insurance. So, with monthly insurance, lenders are not required to disclose the total cost of the insurance for the term of the loan.