What Does Credit Life Insurance Cover?
The primary coverage benefit of credit life insurance is the protection it allows joint borrowers. These plans help ensure that one person is not left to cover the outstanding debt after the other joint borrower passes.5
For example, let’s say you and your partner sign an auto loan together, and the policyholder passes away. Credit life insurance protects your partner from paying off the remaining amount on their own.
In some cases, credit life insurance policies can be written into the loan you are getting.6 However, it is illegal for an entity to require credit life insurance in a loan, so it isn’t required to have credit life insurance for a loan.7
Usually, there is no medical exam or fewer health regulations in credit life insurance because these plans have less scrutinous underwriting requirements.8
Credit Life Insurance Costs
The cost of credit life insurance varies depending on the specific plan and company you are working with. However, if the credit life insurance plan is built into a loan, you can expect the recurring payments to be higher because they coincide with the amount of the loan.9
While we can’t provide you with an exact cost for credit life insurance, you can use our life insurance calculator to get a better idea of what your costs will look like if you choose a whole to term life insurance plan with Aflac. Your life insurance premiums may be impacted by your location, age, coverage goals and the number of dependents in your life.
Which Life Insurance Plan is Right for Me?
Credit life insurance is not the only option if you hope to protect your partner from unwanted debt. Term life insurance may be a better solution because the beneficiary usually receives the death benefit tax-free. In addition, term life insurance is usually less expensive than credit life insurance, and you can specify how long you need coverage for.10
Since term life insurance is less costly, you can use the money saved on premiums to help pay off any debt. Depending on the unique situation, there may even be funds left over for other needs.11
Also, whole life insurance may be a good route if you are looking for coverage that lasts your entire life, but it can be more expensive.12 However, the death benefit in whole life insurance types of plans is usually guaranteed, which can help minimize financial stressors for your beneficiary.13
Get a Quote for Aflac Life Insurance
Credit life insurance can be a helpful solution for paying off debt, but we encourage you to explore all your options to find the best life insurance plan for your needs. Aflac offers whole and term life insurance that provide the coverage you need at an affordable price. Chat with an agent and get a quote to discover which life insurance plan is best for your lifestyle.
