Credit Life Insurance

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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.

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RELATED FAQS
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  3. Can you do a life insurance to life insurance 1035 exchange after the new life insurance ...

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  5. What is the difference between the death benefit and cash value of an insurance policy?

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  6. Can your life insurance company sue you?

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