Credit Life Insurance
Different types of insurance explained...
Credit Life insurance is a policy that pays off the mortgage in the event the borrower dies, in an effort to make things easier for the remaining family members, by not having to struggle making the monthly mortgage payments or sell the home under duress. Most consumers become aware of credit life policies when they start receiving offers in the mail after they purchase a home and in some cases buy the policy without being informed as to what they are buying.
Many experts recommend that consumers purchase a term life death benefit policy which is less expensive than credit life policies and use the money in the event of death to pay off the mortgage or use the money where they see fit. A credit life policy will only pay off the mortgage where a term life policy gives the consumer more options in the event of an untimely death.