PROSPECT HEIGHTS, Ill. — Household International Inc., the nation’s second-largest subprime lender, announced Wednesday that it will discontinue the sale of single-premium credit insurance and will replace the product with one that can be paid for monthly.

Household is the second big subprime lender to decide in the past month to pull the product. CitiFinancial, the subprime unit of Citigroup Inc., did so last month, saying sales would halt by yearend.

Consumer activists have long associated single-premium credit insurance with predatory lending, and it is often one of the practices targeted by predatory-lending bills that have sprouted across the country in the past year.

Household’s president of consumer lending, Gary Gilmer, said in an interview that the company voluntarily decided to quit selling the product to benefit consumers — not to please regulators or consumer groups. “We are under no regulatory pressure whatsoever to stop marketing single-premium insurance,” he said.

Mr. Gilmer said that switching from single-premium to monthly credit insurance would not alter the company’s profitability in any material way, and a spokesman added that the business represented only a few cents per share of earnings on an annual basis.

Asked whether the move would trim borrowers’ monthly loan payments, however, Mr. Gilmer said that it would depend on the individual, but that payments would generally be lower.

The company’s phaseout of single-premium credit insurance will start in August in five states: North Carolina, Ohio, Wyoming, Connecticut, and Louisiana. Household plans to discontinue single-premium sales in additional states as it gains approval to sell monthly credit insurance there. It has been applying in all 50 states since October.

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