Credit Life Insurance

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Credit Life Insurance A policy assigning the creditor as the beneficiary for insurance on a debtor, thereby remitting balance of payment to creditor upon death of debtor. Therefore it pays off your loan if you die before settling the debt. The question is who is the policy owner in credit life insurance? You are the owner of your credit life insurance policy, but the policy's beneficiary is your lender, rather than beneficiaries of your choosing. The beneficiary of a credit life insurance policy is the lender that provided the funds for the debt being insured. The lender is the sole beneficiary, so your heirs will not receive a benefit from this type of policy. Credit insurance coverage protects businesses from non-payment of commercial debt. It makes sure invoices will be paid and allows companies to reliably manage the commercial and political risks of trade that are beyond their control. The face value of a credit life insurance policy decreases proportionately with the outstanding loan amount as the loan is paid off over time, until both reach zero value. The difference between life insurance and credit life insurance; Although they serve very different needs, credit life and life insurance have a complementary role in your financial plan. Also remember, credit life insurance will also service your outstanding loans if you become disabled or retrenched, while life cover only pays out on death to your beneficiaries. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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