Credit life insurance just covers the debt with a particular lending institution. If you should pass away, the credit insurance policy would pay them the lender what you owed them.
Regular life insurance can be used to repay debts. It is done with a collateral assignment form. If you passed away, the amount that is owed to your lender would be paid to them, and the rest is paid to the beneficiary of your choice. The premium is locked in for a number of years, but every year that you have your policy, less would go to your lender, and more would go to the beneficiary, in the event of your death.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Credit life insurance is generally designed to protect a creditor in the case of the demise of the borrower. So if you were to take a personal loan from a bank for say $100,000, they may require that you take out a credit life policy that would name the bank as the beneficiary. Typically the credit life policy would be a decreasing term policy that would be only for the term of the loan and would decrease in value as the loan balance is reduced.
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Regular life insurance can be used to repay debts. It is done with a collateral assignment form. If you passed away, the amount that is owed to your lender would be paid to them, and the rest is paid to the beneficiary of your choice. The premium is locked in for a number of years, but every year that you have your policy, less would go to your lender, and more would go to the beneficiary, in the event of your death.