What is credit life insurance. Credit life insurance policy is for
paying off the outstanding loan amount, if the borrower died before paying off all the loans. The policy amount will be decreased proportionately with the balance of the principal amount. When the loan amount
reaches zero the policy amount also will reach zero.
Credit life insurance
Credit life insurance protects the dependents of the borrowers if the death of the borrower happens. The dependent will be saved from paying off the balance amount of loan.
Credit life insurance also protects the sureties, when the borrower expired without paying off the loan. Then the sureties should not pay off the loan as it is paid off by the insurance company itself.
Credit life insurance saves the assets which was mortgaged for the loan. When the death of the borrower happens, the assets will not be attached by the loan provider. The insurance company will pay off the outstanding loan amount.
Life Insurance for credit protection protects the loan providers also. While the death occurred, they should not be worried about attaching the mortgaged assets or get back the loan amount from the sureties or dependents of the borrower.
Totally a credit life insurance policy is a necessity while taking a loan. It protects the interests of all parties related to the loan. So ask for a credit life insurance protection when you go for a loan.