(1) Tangible property offered as security may be reasonably insured against loss for a reasonable term, considering the circumstances of the loan. If such insurance is sold at standard rates through a person duly licensed by the Department of Financial Services and if the policy is payable to the borrower or any member of her or his family, it shall not be deemed to be a collateral sale, purchase, or agreement even though a customary mortgagee clause is attached or the licensee is a coassured.
(2) Credit property, credit life, and disability insurance may be provided at the expense of the borrowers and must be provided under a group or individual insurance policy which complies with ss. 627.676-627.684 and lawful regulations thereunder. The cost of such insurance shall be deducted from the principal amount of the loan and shall be disclosed on the statement required by s. 516.15(1) or on a combined note and disclosure statement required by the federal Truth in Lending Act. 