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. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
  6. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
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. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center