Credit life offered by the financial institution is a life insurance policy that PAYS THEM in the event of your death. However it is not only more cost effective for you to purchase your own life insurance policy to cover that debt, but it PAYS YOU. While looking into covering that debt, other debts and considerations could be addressed to ensure your total financial needs are covered and you can live every day to the fullest with the peace of mind that your loved ones will be taken care of financially and live in their hearts forever.
As far as I know (which may not be conclusive), you can buy credit life insurance from banks (who sell it to protect their loans and mortgages) or from the lender from whom you got your loan. This type of coverage usually has a decreasing benefit that goes down as your loan goes down. You can also buy credit card life insurance, which pays off the balance of your credit card at the time of your death.
If you search for credit life insurance on the internet, you will find that it is not recommended by many financial publications, due to its high cost and limitations. E.g. Credit life insurance is only paid to the lender. If you buy regular life insurance, it is paid to your beneficiary, who can in turn pay your lender and use the remainder to pay other bills. While credit life insurance may decrease as your loan goes down, regular life insurance keeps the same death benefit, again, allowing your beneficiary to pay off your loan and keep the rest. The price of regular life insurance is very competitive, and lenders accept it in lieu of credit insurance, as long as you attach a collateral assignment form to the policy.
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If you search for credit life insurance on the internet, you will find that it is not recommended by many financial publications, due to its high cost and limitations. E.g. Credit life insurance is only paid to the lender. If you buy regular life insurance, it is paid to your beneficiary, who can in turn pay your lender and use the remainder to pay other bills. While credit life insurance may decrease as your loan goes down, regular life insurance keeps the same death benefit, again, allowing your beneficiary to pay off your loan and keep the rest. The price of regular life insurance is very competitive, and lenders accept it in lieu of credit insurance, as long as you attach a collateral assignment form to the policy.