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Credit Life Insurance: What It Is, Health Questions, How To Buy


Credit life insurance is a type of life insurance which pays off the amount of debt remaining at the time of a borrower's death. For example if you owe $9,023 on your credit card when you die, the insurer will pay that exact amount to the credit card issuer. If you owe more, the insurance pays more. If you owe nothing, the insurance pays nothing.

Credit life insurance is available to pay off credit card debt, debt on personal property such as automobiles or furniture, and mortgage debt secured by real estate.

  • Credit card life insurance pays off the debt at the time of death. It goes up and down depending on the amount of debt. This generally includes debt incurred by writing a check on the account.
  • Credit life insurance on a mortgage is known as "Mortgage Insurance" or "Mortgage Life Insurance." The amount of the insurance decreases in step with decreases in the amount of the remaining mortgage debt.
  • Credit life insurance on personal property, like Mortgage Insurance, decreases as the amount of the outstanding debt decreases.

With credit life insurance, there is never an amount left over for beneficiaries.


It used to be that here were no health questions or physical exams needed to qualify for credit life insurance. There are still no exams required. However, as a general matter, there are usually a few health questions on the applications. There is no way to know if you qualify given your health history unless you look at the actual questions. (It is worth the time to get the questions. You may be surprised to find that you qualify.)

If you do apply for this life insurance, do not lie on the application. The company may check the accuracy of your answers on your application when a claim is made.


Credit card life insurance: Credit life insurance with respect to credit card debt is purchased directly from the credit card company. Credit card plans that offer credit life insurance generally do so when you open the account. If you already have a credit account, you can call the company and ask if credit life insurance can be added. (Ask about credit disability insurance while you are at it just in case you may need it). Do not be surprised if instead of questions about your health on the application, there is a period of time during which the benefit is not paid.  


  • If you have credit card accounts which will not permit you to add credit life insurance, consider replacing the account with a new account that does have such life insurance. 
  • When you call a company with which you currently have a credit card, if it says it does not offer credit life insurance, ask if it has some feature that pays off the amount of the debt in the event of your death. Some companies give this type of coverage a name other than "credit life insurance."

Personal property such as furniture:  Credit insurance on personal property is offered by the seller of furniture or other property. As withother credit insurance, the insurance fluctuates with the amount of debt. In this case, there is a steady reduction in the death benefit as the loan is paid off.

Mortgage insurance: Ask the mortgage lender if it sells mortgage insurance. If not, contact an independent insurance broker and find out if it is available in your area. If not, ask the broker if you can qualify for term insurance.

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