Credit Life Insurance

AAA

DEFINITION of 'Credit Life Insurance'

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.

INVESTOPEDIA EXPLAINS '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.

VIDEO

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Amount at Risk

    The monetary difference between the death benefit paid by a permanent ...
  3. Creditor

    An entity (person or institution) that extends credit by giving ...
  4. Debt Service

    The cash that is required for a particular time period to cover ...
  5. Life Insurance

    A protection against the loss of income that would result if ...
  6. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
Related Articles
  1. Insurance Tips For Homeowners
    Insurance

    Insurance Tips For Homeowners

  2. Understanding Your Insurance Contract
    Insurance

    Understanding Your Insurance Contract

  3. 5 Insurance Policies Everyone Should ...
    Home & Auto

    5 Insurance Policies Everyone Should ...

  4. Life Insurance
    Budgeting

    Life Insurance

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center