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Simple English definitions for legal terms
credit life insurance
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A quick definition of credit life insurance:
Credit life insurance is a type of insurance that pays off a borrower's debt if they die. It is usually offered with consumer installment loans. If the borrower dies before paying off the loan, the insurance company will pay the remaining balance. This type of insurance helps protect the borrower's family from having to pay off the debt if they pass away.A more thorough explanation:
Credit life insurance is a type of life insurance that is often included in consumer installment loans. If the borrower dies before paying off the loan, the insurance will pay the remaining balance. This type of insurance is meant to protect the lender, but it can also provide peace of mind for the borrower's family.
For example, if someone takes out a car loan and dies before paying it off, the credit life insurance will pay the remaining balance on the loan. This means that the borrower's family will not be responsible for the debt.