Definition Of Credit Life Insurance

Usually sold by banks or finance companies to their customers at the point of sale. Insurance that pays to a lender the full principal balance of a loan in the event of the death of the borrower.

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It is illegal for a lender to require credit life insurance or credit disability insurance as a condition of making a loan.

Definition of credit life insurance. It pays the lender a specified amount if the borrower dies before full repayment of the loan. Usually a term life insurance policy on the life of a borrower and a lender as the beneficiary. Credit life insurance term life insurance that pays off the balance of a loan if the borrower dies.

Credit life insurance definition is insurance on the life of a debtor under an installment purchase contract relieving the debtors estate of further payments in event of the debtors death. Credit life insurance is a specialized type of life insurance policy intended to pay off specific outstanding debts in the case the borrower dies before the debt is fully repaid. Credit life insurance means insurance on the life of a debtor in connection with an extension of credit that pays a person if the debtor dies.

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