What Exactly Is Credit Life Insurance? 
Video Transcript : What is credit life insurance ? There 's some different definitions on this out on the web that you can see , but credit life insurance , some banks will say , `` I want to indemnify a loan . '' If I 'm going to take a loan out from a bank , they want to be indemnified in case something happens to you so they may ask for life insurance on your life , somewhat what they call credit life . It 's very similar to mortgage insurance . If something happens to you , they want to indemnify the mortgage , or pay it off , in case one of the people that have obligated themselves to the mortgage dies . Credit life insurance can also be used in business scenarios where business take out loans , and those loans need to be protected . The bank , or the institution that 's loaning , wants to protect themselves and indemnify themselves so in case one of the people that are on the loan die , they 're going to have their insurance pay off their debt to the bank or the institution that they 're borrowing from . 