Credit Insurance

AAA

DEFINITION of 'Credit Insurance'

Credit insurance is a type of life insurance policy purchased by a borrower that pays off one or more existing debts in the event of a death, disability, or in rare cases, unemployment. Credit insurance is marketed most often as a credit card feature, with the monthly cost charging a low percentage of the card's unpaid balance.

INVESTOPEDIA EXPLAINS 'Credit Insurance'

Credit insurance can be a financial lifesaver in the event of certain catastrophes. However, many credit insurance policies are overpriced relative to their benefits, as well as loaded with fine print that can make it hard to collect on. If you feel that credit insurance would bring you peace of mind, be sure to read the fine print as well as compare your quote against a standard term life insurance policy.

RELATED TERMS
  1. Death Benefit

    The amount on a life insurance policy or pension that is payable ...
  2. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
  3. Mortgage Life Insurance

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

    A type of annual renewable term life insurance that provides ...
  5. Credit Card Authorized User

    Definition of an authorized user of a credit card.
  6. Lloyd's Of London

    A British insurance market where members join hands as syndicates ...
Related Articles
  1. The History Of Insurance
    Home & Auto

    The History Of Insurance

  2. How An Insurance Company Determines ...
    Home & Auto

    How An Insurance Company Determines ...

  3. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  4. How Much Life Insurance Should You Carry?
    Insurance

    How Much Life Insurance Should You Carry?

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. 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. ...
  3. 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 ...
  4. 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. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center