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
  1. How can I borrow money from my life insurance policy?

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    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 >>
  3. 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 >>
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  5. How do I determine the face value of a life insurance policy?

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