Credit life insurance is a type of life insurance that pays off a specific debt (such as a mortgage, car loan, or credit card balance) if you die. Credit life insurance is typically sold by lenders at the time of the loan. Credit life insurance is usually more expensive than a standard term life policy.
Key Points
- Credit life insurance: pays off a specific debt if you die
- Sold by lenders at the time of the loan
- Usually more expensive than a standard term life policy
- Death benefit decreases as the loan balance decreases
- A standard term life policy is typically a better value than credit life insurance