Holly Marshall remembered how anxious she became about making loan payments when laid off from a job seven years ago. So when she was offered “involuntary unemployment insurance” as part of a car loan three years ago, she jumped.

The decision paid off: In November, Marshall lost her information technology job at Plato Learning, an online education software firm, and the insurance on her car payment kicked in.

“I had involuntary unemployment insurance on certain loans like my car. That saved me about $700 a month,” she said. “I think that is something people often don’t (buy), but to me it was so cheap. And I’d rather (pay the premium) than face a $350-a-month car payment” while unemployed.

With the grim outlook for the economy increasing the anxiety level of all workers, credit insurers say they expect to sell more policies in the coming months.

Consumer advocates are skeptical of the value of such plans. Most people won’t lose their jobs, meaning the policies are unnecessary. In addition, the range and period of coverage can vary widely from one policy to the next.

“For the majority of the cases that I have seen, it’s a waste of money because people either forget they have it, or they unknowingly signed up for it or never really understood what it was,” said Irene Ruiz, a credit counselor.

“And then in a couple of other situations, people actually have tried to use it after being laid off. And either they misunderstood the terms or they don’t qualify for various reasons.”

Still, with consumer debt levels at all-time highs, it takes only a brief period of unemployment for bills to mount, credit ratings to be wrecked and homes to go into foreclosure.

Once little known and rarely used, credit insurance temporarily covers customers’ monthly payments for car loans, mortgages and credit cards should they lose their jobs.

GenWorth, AIG’s American General Financial, Wells Fargo Financial, Federal Highway Credit Union and other providers say customers are expressing new interest in the policies. But consumer advocates and the credit insurers themselves warn applicants to read the fine print carefully before signing.

Policies differ widely from one company to another in cost, coverage and the time span over which insurers are willing to pay certain bills.

Economists note coverage might not be easy to come by, given the tighter underwriting guidelines that AIG and many other financial institutions are using these days.

“Definitely more people are buying it (once they learn) about it,” said Jack Lundberg, consumer lending manager for Federal Highway Credit Union in St. Paul, Minn., which now sells the insurance on one of every five loans. “People’s ears definitely perk up when you say you have a product to cover unexpected unemployment.”

Lundberg noted that prices and policies for the protection are “all over the map,” and each one has certain restrictions. Some charge $1.50 a day or $45 a month to cover a car note for six months. Others charge $9 a month per $1,000 of credit card debt and yet only agree to pay the customer’s monthly minimum payment in the event of job loss. Still others charge $2 a month for the same coverage, he said.