What type of insurance is used to ensure loan repayment in the event of a borrower's death?

Credit Life Insurance is specifically designed to ensure that a loan is repaid in the event of the borrower's death. This type of insurance pays off the outstanding balance of the debt directly to the lender, ensuring that the borrower's family or estate is not burdened with the mortgage obligation.

While general Life Insurance can provide financial support to beneficiaries upon the death of the policyholder, it is not specifically tied to loan repayment. Similarly, other options like Mortgage Life Insurance and Term Life Insurance may offer benefits related to mortgage debt, but Credit Life Insurance explicitly caters to the direct needs of loan repayment, making it the most appropriate and targeted choice in this context.

In the case of Mortgage Life Insurance, it usually pertains more broadly to achieving death benefits related to mortgage loans, but does not specifically align with the concept of paying off the loan in the same structured manner as Credit Life Insurance. Therefore, choosing Credit Life Insurance accurately reflects the type of insurance that is designed to ensure loan repayment specifically upon the death of the borrower.