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Credit Health Insurance

Credit Health Insurance

Definition

(1) Insurance designed to cover a borrower's indebtedness with the creditor receiving the policy benefits to pay off the debt if the borrower becomes disabled or dies accidentally. Credit insurance can be written as an individual policy for a single borrower or group coverage for a number of debtors with the creditor as master policyholder. (2) Disability or health insurance sold by a lender to cover payment of a debt or an installment loan in the event the debtor is disabled. (3) Coverage issued to a creditor on the life of a debtor so that, if the debtor becomes disabled, the insurance policy pays the balance of the debt to the creditor.

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