Credit Life Insurance

“A type of insurance, often bought by mortgagors, in which the amount of the policy matches the loan balance at any given time; designed so that the loan will be paid off in full in the event of death.”

It implies that you obtain a specific loan which includes insurance policy. This insurance secures the loan of the customer and in case of the client’s death, pays off that loan. Generally, the policy should be indulged in after you have a secure full coverage life insurance policy, or if the offer is too good to miss.

There is much deliberation in the client’s mind when it comes to purchasing this type of insurance. It should be noted that careful research into the offer might offer a win-win situation for both the client and the lender without any negative repercussion of buying the deal. Peruse the conditions of the deal carefully; develop a foresight in case of any unforeseen future events where the offer would be helpful.

The caveat of insurance policies offered in the market is that it caters to clients who have less probability of death by natural causes. More specifically, in terms of age, people under 65 years of age are eligible for credit life insurance policies; as are people with no record of previous serious medical history. Some policies require a certain amount of working time per hour of the client.

There are different set ups of loans with which credit life insurance is available. Closed ended loans require monthly installments, and the limit of amount and time period is fixed. Open end loan is more flexible according to customer needs. The amount and time limit is not fixed in open end loan. Buying credit life insurance policy is an option that should be looked into when you have additional insurance plan secured.