The primary purpose of credit life insurance is to pay off the outstanding debt of a borrower in the event of their death. This ensures that the borrower’s family or estate is not burdened with the debt after their passing. It does not cover illness, act as a savings vehicle, or directly increase financing ability.
[Reference: Virginia Life, Annuities, and Health Insurance Code, Section 38.2-3430 (Credit Life Insurance Coverage), , , ]
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