Credit Life Insurance

Loading the player...

What is 'Credit Life Insurance'

Credit life insurance is a life insurance policy designed to pay off a borrower's debt if that borrower dies. The face value of a credit life insurance policy decreases proportionately with an outstanding loan amount as the loan is paid off over time until both reach zero value.

BREAKING DOWN 'Credit Life Insurance'

Credit life insurance can protect a person's dependents. It may also be required by some lenders; therefore, it is important to read the fine print of any loan agreement to determine whether credit life insurance is required.

RELATED TERMS
  1. Policy Loan

    A loan issued by an insurance company that uses the cash value ...
  2. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
  3. Credit Insurance

    Credit insurance is a type of life insurance policy purchased ...
  4. Mortgage Life Insurance

    An insurance policy designed specifically to repay mortgage debt ...
  5. Decreasing Term Insurance

    A type of annual renewable term life insurance that provides ...
  6. Key Person Insurance

    A life insurance policy that a company purchases on a key executive's ...
Related Articles
  1. Personal Finance

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  2. Financial Advisor

    Which Life Insurance is Right For You?

    Consumers have choices when it comes to life insurance. Knowing your future needs for cash or retirement can make the difference in what you select.
  3. Personal Finance

    Getting Your (Insurance) House in Order

    From starting a family to retirement, insurance can play a role in taking care of financial needs. This piece looks at some of the choices you can make.
  4. Financial Advisor

    Whole or Term Life Insurance: Which Is Better?

    Learn the difference between term life insurance and whole life insurance. Understand when it is beneficial to buy each type of life insurance.
  5. Personal Finance

    What's Better: Whole Life or Term Insurance?

    Life insurance can be a difficult decision to make, especially for a young adult. Here's a look at the benefits and costs of getting whole life insurance.
  6. Trading

    Permanent Life Policies: Whole Vs. Universal

    If you're looking for life-long security, choosing between these two is the key.
  7. Personal Finance

    How Much Life Insurance Should You Carry?

    Learn how much - if any - insurance you really need.
  8. Investing

    3 Reasons to Avoid Term Insurance

    Find out the reasons why term life insurance may not be for everybody, and why you may want to avoid it in favor of a permanent life insurance policy.
  9. Personal Finance

    Millennials Guide: Too Young for Life Insurance?

    Unless you have kids, it's easy to think you don't need life insurance Here are the reasons why you might– as well as which type and how much to get.
  10. Personal Finance

    Finding the Right Life Insurance

    Learn how to determine the type of life insurance you need and use our calculator to find out how much coverage you should have.
RELATED FAQS
  1. How can I borrow money from my life insurance policy?

  2. How do I borrow money from my life insurance?

    Hello, I would like to find out the steps I need to take towards borrowing money off my life insurance. ... Read Answer >>
  3. Can you do a life insurance to life insurance 1035 exchange after the new life insurance ...

  4. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
  5. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
  6. What is the difference between term and universal life insurance?

    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Answer >>
Trading Center