YOU ASK:

What is the definition of Credit Life Insurance?

WE ANSWER:

Credit life insurance is life insurance bought by a borrower so that in case he dies before the loan is fully paid, the creditor still gets to have the full payment. Credit Life Insurance is a common feature in auto loans and credit cards. Some credit life insurance also includes disablement, since a person who gets disabled may find it difficult to pay off outstanding loans.

Credit Life Insurance is relatively cheaper than whole life, since it is a term life insurance, where the coverage lasts for approximately the length of the loan. Also, as the debt is paid, this tends to lower credit life insurance premiums since the amount of outstanding balance decreases every month.

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