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At the end of 1992, over $208 billion of credit life insurance was in force on over 56 million consumer loans in the U.S.4. Credit life insurance is sold to borrowers in conjunction with consumer loans. Generally speaking, credit life insurance pays off the loan obligation if the insured borrower or co-borrower dies. Similarly, credit disability isurance provides a monthly benefit equal to the loan's monthly payment if the primary borrower is disabled. Over the past decade, other forms of credit insurance have also emerged as a safeguard against income interruptions, most notably credit unemployment insurance.
KeywordsLife Insurance Purchase Decision Disability Insurance Credit Insurance Insurance Purchase
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- 1.Press release, Consumer Federation of America, May 20, 1992.Google Scholar
- 2.Press release, Consumer Federation of America, May 20, 1992.Google Scholar
- 3.William F. Burfeind, “Credit Life Insurance is Often a Good Deal,” USA Today, June 7, 1990.Google Scholar
- 4.1992 Life Insurance Fact Book, The American Council of Life Insurance.Google Scholar
- 5.For an excellent, detailed explanation of credit insurance products and distribution channels see Gary Fagg, Credit Life and Disability Insurance, (CLICO Management, Inc., Springfield, Ohio) 1986.Google Scholar
- 6.William F. Burfeind, “Consumer Credit Insurance: Serving a Need,” position paper published by the Consumer Credit Insurance Association, Chicago, IL, 1990, p 2.Google Scholar