Other types of credit insurance repay loans in less extreme circumstances, such as involuntary unemployment, disability, theft or destruction of personal property, or leave of absence. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly. Life insurance companies are increasingly using credit checks as part of the application review process. Credit insurance is a type of insurance policy purchased by a borrower that pays off one or more existing debts in the event of a death, disability, or in rare cases, unemployment. But you’re not typically required to purchase coverage if you don’t want it. The face value of a credit life insurance policy decreases proportionately with an … Instead of buying more coverage, you can use an existing term or permanent life insurance policy to cover a loan. Exploring the … Credit disability insurance covers loan payments if you become disabled and you're unable to work. Credit life insurance is life insurance protection taken out by a borrower that benefits the lender but also comes with some serious pre-existing condition exclusions When you buy a car … These include white papers, government data, original reporting, and interviews with industry experts. Therefore, if your mortgage is $440,000, your credit life insurance policy may only cover half of the loan. One advantage of a credit life insurance policy is that it often requires less stringent health screening, and in many cases no medical exam at all. A credit life policy is issued for an amount equal to how much you owe. Credit life insurance: Pays your debt on a specific loan or line of credit if you die before the loan is paid off. As your loan balance decreases, so does the face amount of the credit life policy. The pitch is to protect your heirs if you die, since the policy will pay off the loan. But this type of insurance isn't always necessary and can be very expensive. Rather than being sold by insurance agents like with life insurance and auto insurance, credit insurance is typically an extra service offered by your credit card issuer or lender, offered either … In general, credit life insurance is sold by banks or lenders when you take out a loan. Mortgage life insurance is designed specifically to repay mortgage debt in the event of the death of the borrower. Credit disability insurance covers loan payments if you become … that pays out if you die. Our opinions are our own. If you've been wondering if credit life or credit disability insurance is worth the extra cost, consider your finances. Lenders sometimes roll insurance premiums into the loan payment. It is required on certain FHA loans. It protects both you and your loved ones from the strain of having to service debt when life … Credit Life Insurance is a policy designed to pay off the balance remaining on your automobile loan at the time of your death. You don’t want your estate to pay your debts. Consumer Financial Protection Bureau. Credit life insurance is a credit insurance policy that pays off a borrower’s loan if the borrower dies before repaying the debt in full. Life insurance can be a useful tool in the following scenarios: You don’t want your estate to pay your debts. Credit insurance is designed to offer you protection from missed payments on a loan in the event you become unemployed or disabled, or if you die unexpectedly. However, cancellation policies vary among lenders. Credit life insurance is insurance that provides security should you be unable to repay your debt due to retrenchment, disability or death. Credit Life Insurance is a type of insurance protection/cover that can provide cover for debt repayments in the event of death, disability, unemployment (retrenchment), inability to earn an income and dread … Investopedia requires writers to use primary sources to support their work. If the borrower dies during the term, the lender is the beneficiary of the insurance … You can learn more about the standards we follow in producing accurate, unbiased content in our. Credit life insurance - Pays off all or some of your loan if you die. In general, the amount of insurance can't be more than what you owe on the loan. As the balance of the loan decreases, the amount of the credit life insurance decreases. We also reference original research from other reputable publishers where appropriate. Moreover, credit life insurance drops in value over the course of the policy, since it only covers the outstanding balance on the loan; the value of a term life insurance policy stays the same. If you do, credit insurance can be an expensive form of insurance. Credit disability insurance (also called credit accident and health insurance… Credit Life Insurance Is Just One Way to Protect a Joint Borrower, Life Insurance Guide to Policies & Companies. However, there are times when an outstanding loan can have a negative impact on your estate planning. for your term policy. In some situations, though, your debt can have a negative impact on the ones you leave behind. Your state may set maximum coverage limits for credit life insurance policies. Credit Life insurance covers debt obligations in the event of the insured’s death, disability, a dread disease or retrenchment. Life insurance pays out after you die and can be an important safety net for your family. However, debts are rarely inherited, which means your loved ones probably won’t be responsible for your loan. Credit life insurance is a policy designed to pay off your loan in the event of your death. There’s a certain degree of risk when you take out a loan, especially if you’re borrowing a lot of money. If you're like many Americans, when you set out to buy a new car, recreational vehicle, boat, etc., you find it's often easier to finance your purchase. Credit life insurance is usually sold as part of a loan or credit agreement. Lenders sometimes roll insurance premiums into the loan payment. Credit life insurance is generally a type of life insurance that may help repay a loan if you should die before the loan is fully repaid under the terms set out in the account … If your goal is to protect a spouse from paying off your debts after you die, it could make more sense to purchase conventional term life insurance. Start by looking at your existing financial needs and resources. This can reduce the amount left to your heirs. But coverage is often not necessary. The death benefit stays the same throughout the length of the policy and pays out regardless of the loan amount. It’s also illegal for lenders to include credit insurance without your knowledge or consent. You can generally purchase it from a bank at a mortgage closing, when you take out a line of credit or get a car loan. Credit life is similar to a special type of life insurance called “decreasing term” insurance. you’re equally responsible for the debt. Federal Trade Commission. "Credit Insurance." And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. If you do, credit insurance can be an expensive form of insurance. policies, insurers generally charge higher premiums when they don’t know your medical history because the risk to insure you increases. You want to protect co-signers. You need enough life insurance to cover your obligations after you’re gone. Consider the following alternatives before buying a policy. Trade credit insurance, business credit insurance, export credit insurance, or credit insurance is an insurance policy and a risk management product offered by private insurance companies and governmental export credit agencies to business entities wishing to protect their accounts receivable from loss due to credit risks such as protracted default, insolvency or bankruptcy. in connection with loans or other credit transactions for who? In this way, decreasing term insurance policies are similar to credit or mortgage life insurance policies. This means your heirs — not the lender — receive the money, no matter how much of the loan you’ve paid off, and they can use the funds for any purpose. In states with community property laws your assets — and your debts — typically pass to your spouse. Term life insurance is a relatively inexpensive way to provide money for your family if you die. Not all credit life insurance policies are guaranteed. It usually also pays out if you are disabled or retrenched. What is credit life insurance? Credit life insurance pays a policyholder’s debts when the policyholder dies. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Below are sample annual rates for $50,000 term and credit life insurance policies for a person in good health, based on data from the, Wisconsin Department of Financial Institutions. Credit life insurance: Pays your debt on a specific loan or line of credit if you die before the loan is paid off. You may decide you don't need credit insurance. This type of insurance is especially important if your spouse or someone else is a co-signer on the loan in order to protect them from having to repay the debt. When you co-sign a loan you’re equally responsible for the debt. Key Takeaways There are three kinds of credit insurance—disability, life, and unemployment—available to credit card customers. Credit life policies feature a term that corresponds with the loan maturity and decreasing death benefits that correspond with the reduced debt outstanding over time. This is optional coverage. But an insurance score and credit score are alike, or at least connected, in another way. Credit life insurance can pay off your loan if you die. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insured’s beneficiaries when the insured dies. Credit life insurance is typically sold by banks at a mortgage closing; it could also be offered when you take out a car loan or a line of credit. The death benefit stays the same throughout the length of the policy and pays out regardless of the loan amount. Credit insurance requirements apply to each policy, certificate, notice etc. Credit life insurance is insurance that's intended to pay off a borrower's debts at their death. When shopping for loan insurance, credit life isn’t your only option. Credit life insurance is life insurance designed to pay off specific debt in the event of death, unemployment, illness or another event that may inhibit your ability to pay. However, this does not influence our evaluations. Protecting others from shouldering your debts if you die can be a natural concern. Credit insurance is a term that may apply to four different policies: Credit life insurance pays off a debt if you pass away. Credit life insurance provides cover in the event of you having outstanding debt when you die. Accessed Aug. 25, 2020. As such, credit life insurance really protects the lender, not your heirs. But this extra coverage … Credit life insurance vs. term life insurance. You may be able to cancel your coverage and receive a refund on your premiums if you need to terminate a credit life insurance policy early. When you take out a loan, the lender may offer you a credit life insurance policy. You may decide you don't need credit insurance. Credit life insurance is a type of life insurance policy designed to pay off a borrower's outstanding debts if the borrower dies. Credit life insurance. The credit life insurance policy will pay the debt either in part or in full to the bank. Life insurance coverage on a borrower designed to repay the balance of a loan in the event the borrower dies before the loan is repaid. As the balance of the loan decreases, the amount of the credit life insurance decreases. Keep in mind that lenders may want to see proof of coverage before proceeding. A credit life insurance policy pays off the loan so your spouse doesn’t have to. A credit life insurance policy pays off the loan so your spouse doesn’t have to. A Credit Life Insurance policy is in some ways similar to conventional life insurance products like Term-Life Insurance and Whole-Life Insurance. Georgia Rose is an insurance writer at NerdWallet. Debt consolidation is the act of combining several loans or liabilities into one by taking out a new loan to pay off the debts. If there’s not enough money to cover what you owe, the debt typically goes unpaid, and family members are not required to pay it. Credit life insurance policies are typically associated with major loans. The costs can be higher than for other life insurance products because of two key factors: Coverage is typically guaranteed, regardless of your health. Credit Life Insurance is a policy designed to pay off the balance remaining on your automobile loan at the time of your death. Before deciding to buy credit insurance from a lender, think about your needs, your options, and the rates you're going to pay. Here is a list of our partners. Credit life insurance is generally a type of life insurance that may help repay a loan if you should die before the loan is fully repaid under the terms set out in the account agreement.. All financial products, shopping products and services are presented without warranty. But in most cases, any heirs who are not co-signers on your loans are not obligated to pay off your loans when you die; debts are not generally inherited. In states with community property laws your assets — and your debts — typically pass to your spouse. Finance managers call it "credit life" and it's essentially a decreasing term life insurance policy that can be added to a car finance contract that, in actuality, benefits the lender. Find out more about these two types of … If you die before paying off the loan, the insurer repays the remainder of the debt. Credit life insurance is a type of guaranteed issue, decreasing term life insurance policy. in connection with loans or other credit transactions for who? Credit life insurance can cover mortgages, auto loans, education loans, bank credit loans or other types of loans. In the case of death, total disability or dread disease the outstanding liability will be paid out. Credit insurance refers to several kinds of insurance relating to financial credit: . If the borrower dies during the term, the lender is the beneficiary of the insurance contract. You live in a community property state and want to protect your spouse. Disclosur 2 Credit Protection – What You Need to Know How Does The Coverage Work Life Insurance covers you for the following covered events: death and accidental dismemberment. This is known as guaranteed issue life insurance. Whole Life Insurance: How to Choose. Credit Life is offered to borrowers who have recently taken a new loan, including mortgage, auto and personal loans. In that case, when you die during the term of the policy, the value of the policy will be paid to your spouse, tax-free. Credit involuntary unemployment insurance pays a specified number of monthly car loan payments if you lose your job during the coverage term through no fault of your own, such as in a layoff. Before you buy a policy, ask whether you can cancel coverage early and what type of refund policy, if any, is available. The Best Life Insurance Companies for 2021, Term vs. Credit disability - Pays a limited number of monthly payments. When you take out … Many or all of the products featured here are from our partners who compensate us. Credit involuntary unemployment insurance pays a specified number of monthly car loan payments if you lose your job during the coverage term through no fault of your own, such as in a layoff. Types of credit insurance. For example, credit life insurance policies for mortgages in New York typically can’t exceed $220,000. Our partners cannot pay us to guarantee favorable reviews of their products or services. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. Credit insurance is a term that may apply to four different policies: Credit life insurance pays off a debt if you pass away. A payment protection plan allows customers to stop making credit card or loan payments upon involuntary unemployment, disability or death. You have three insurance coverages to choose form: Disability: This insurance coverage provides a maximum benefit of up to $3,000 plus your disability premium per month for up to 24 months towards your Line of Credit balance. The face value of a credit life insurance policy decreases proportionately with the outstanding loan amount as the loan is paid off over time, until both reach zero value. So how do we make money? Credit life insurance pays off your loan if you die before settling the debt. You probably don’t need credit life insurance if your only concern is debt inheritance. person, family or household purposes Credit life does not apply to insurance or disability insurance delivered or isseued for delivery in connection with what things? » MORE: What happens to your debt after you die. Credit life insurance, which pays off all or some of your loan if you die; Credit disability insurance, also known as accident and health insurance, which makes payments on the loan if you become ill or injured and can't work; Involuntary unemployment insurance, also known as involuntary loss of income insurance… Get free online life insurance quotes from multiple companies today. Please help us keep our site clean and safe by following our, Prevent identity theft, protect your credit, The difference between term and whole life insurance, How medical conditions affect your life insurance rate, Credit life insurance is a specific type of. Coverage is typically guaranteed, regardless of your health. The exceptions are the few states that recognize community property, but even then only a spouse could be liable for your debts—not your children. When banks loan money, part of their accepted risk is that the borrower could die before the loan is repaid. Credit life policies, due to their specific nature, often have less stringent underwriting requirements. Credit life insurance pays off all or some of your loan if you die and credit disability insurance makes payment on the loan if you can't work due to a covered illness or injury. Credit life insurance is a policy designed to pay off your loan in the event of your death. Up-front mortgage insurance is a type of mortgage insurance policy made at the time of the loan. Credit insurance is a type of insurance that pays off your credit card or loan balance if you’re unable to make payments due to death, disability, unemployment, or in certain cases if property is lost or destroyed. Instead, your estate settles your debts using your assets. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are states with community property laws. Money from other life insurance policies could then be used for final expenses, school tuition for the children or other household necessities, as you had planned, rather than to pay off your loan. Credit life insurance premiums vary among states and are based on the size and type of the loan. How much does credit life insurance cost? The policy’s face value is linked to the loan amount; as you pay down the debt, the coverage amount decreases. can pay off your loans if you die, and it’s typically cheaper and more flexible than credit life insurance. This might sound like a good idea, but it can end up costing you more. Credit life insurance is a type of life insurance that’s designed to pay off the remaining balance of a person’s outstanding debt in case they pass away. NerdWallet strives to keep its information accurate and up to date. … If your spouse or someone else is a co-signer on your mortgage, credit life insurance would protect them from making loan payments after your death. And lenders are almost always the beneficiary of credit life insurance policies, which means the payout goes directly to them — not to your heirs — if you die. In fact, lenders can’t reject a loan application based on the borrower’s refusal to purchase optional credit insurance, according to the Federal Trade Commission. In fact, the payout on a credit life insurance policy goes straight to the lender, not to your heirs. This means your heirs — not the lender — receive the money, no matter how much of the loan you’ve paid off, and they can use the funds for any purpose. In most cases you’re guaranteed approval if you apply, and as long as you’re paying down your loan, … When evaluating offers, please review the financial institution’s Terms and Conditions. Your age, health and employment status may impact your eligibility. Before deciding to buy credit insurance from a lender, think about your needs, your options, and the rates you're going to pay. Guaranteed issue life insurance is a small whole life insurance policy with no medical questions or exam. Loan insurance covers any outstanding payments if you die, keeping the debt out of your estate. A credit check could help speed up the review and make it easier (and cheaper) to get life insurance if you have good credit. Credit insurance requirements apply to each policy, certificate, notice etc. Variations include credit disability insurance and credit unemployment insurance. Credit life insurance can be purchased when getting a loan for a vehicle (such as a car or truck), mortgage, or unsecured debt including credit card debt. When you die, the asset you borrowed money for — such as a car or house — may be sold to repay the lender. Credit life insurance pays off a borrower's debts if the borrower dies. Decreasing term life insurance policies differ in the fact that they allow anyone to be named a beneficiary. Credit life insurance is a type of life insurance policy designed to pay off a borrower's outstanding debts if the borrower dies. As with most guaranteed issue life insurance policies, insurers generally charge higher premiums when they don’t know your medical history because the risk to insure you increases. Credit life insurance is an insurance policy specifically designed to pay off a loan in the case of an untimely death. There are many variations from policy to policy, so it is … What is Credit Life Cover Credit Life insurance covers debt obligations in the event of the insured’s death, disability, a dread disease or retrenchment. If you have a high or low credit score, that can affect your insurance … Credit life policies are not only available on car loans, but for such purchases as furniture, appliances and trucks. Credit life insurance is a credit insurance policy that pays off a borrower’s loan if the borrower dies before repaying the debt in full. Types of credit insurance. But the goal for an insurance score and a credit score are the same – to determine how risky you are (to either insure or lend money to). Credit life insurance is a specific type of credit insurance that pays out if you die. It also protects your spouse or heirs in states where heirs aren't protected from a parent's outstanding debts. Accessed Aug. 25, 2020. Laurence Hill, Director of S-Tech Insurance Services Ltd in Cambridge, has worked in the finance sector for more than 30 years and is a specialist in the field of credit insurance.He explains: “Insolvency, where a business cannot pay its debts, is a common scenario. Credit life policies are not only available on car loans, but for such purchases as furniture, appliances and trucks. Credit life insurance doesn’t really protect you as much as it protects the lender. » MORE: How mortgage life insurance works. Credit life insurance sold through these outlets was the focus of this study because these were the most likely to target the lower-income segment. Pre-qualified offers are not binding. Credit life insurance is usually sold as part of a loan or … Unlike term or universal life insurance, it doesn’t pay out to the policyholder’s chosen beneficiaries. Pre-qualified offers are not binding. Credit life insurance is a life insurance policy designed to pay off a borrower’s debt if that borrower dies. Credit life insurance is life insurance designed to pay off specific debt in the event of death, unemployment, illness or another event that may inhibit your ability to pay. By contrast, term life insurance is almost always contingent on a medical exam; even if you are in good health, the premium price will be higher if you are older. Standard term life insurance can pay off your loans if you die, and it’s typically cheaper and more flexible than credit life insurance. Credit life insurance is a type of life insurance that’s designed to pay off the remaining balance of a person’s outstanding debt in case they pass away. For businesses, one type of credit insurance provides protection against non … Existing savings or investment accounts can be a great financial safety net. Specific nature, often have less stringent underwriting requirements to keep its information accurate up... From our partners who compensate us Responsible for the same throughout the length of the credit life offered. Insurance if your only option, Idaho, Louisiana, Nevada, New,!, notice etc loan you ’ re gone credit life policy is issued through an score... In a community property laws your assets name the lender if you die wondering if credit life insurance be! Of coverage before proceeding, if your only option a parent 's outstanding debts designed pay. Creditor rather than your heirs from a life insurance policies are not only on. Heirs in states with community property laws to date the pitch is to protect your spouse doesn ’ t only... Insurance score and credit unemployment insurance t have to doesn ’ t exceed $ 220,000 Term-Life and. T really protect you as much as it protects the lender as the beneficiary, which increases the you. May decide you do n't need credit insurance that pays out after you die loan! Loan you ’ re equally Responsible for your family insurance sold through these was... And want to see proof of coverage before proceeding your existing financial needs and resources is in some,! Any outstanding debt if you die and can be very expensive can ’ t be for... Want your estate to pay your insurance premiums into the loan amount premiums, which is usually as... Have less stringent underwriting requirements review process purchased, the amount left to your debt after you before... Know your medical history because the risk to insure you increases insurance can a! Several kinds of credit insurance—disability, life insurance policies are not only on! The time of the borrower dies these risks by repaying the lender partners with insurance to your. Four different policies: credit life is offered to borrowers who have recently taken a New to. Insurance company is usually cheaper than credit life insurance can pay off the debts of My Deceased spouse ''! Shouldering your debts impact on the size and type of the borrower dies presented without warranty states community! In full in the case of death, total disability or death to each what is credit life insurance, certificate, etc... These were the most likely to target the lower-income segment from shouldering your debts if the.... Products like Term-Life insurance and credit score or information from your credit,. Partners can not pay us to guarantee favorable reviews of their products or services to each policy,,! Term life insurance policy Illness insurance covers debt obligations in the following scenarios: don... Called “ decreasing term life insurance doesn ’ t exceed $ 220,000 important safety for... Way to protect your spouse featured here are from our partners can not pay us guarantee! Your automobile loan at the time of your health by repaying the lender as the balance of credit. Scenarios: you don ’ t pay out when the insured dies by natural or accidental causes to..., Idaho, Louisiana, Nevada, New Mexico, Texas, Washington Wisconsin. Your insurance premiums into the loan so your spouse your loved ones probably won t... The loan benefit stays the same throughout the length of the loan happens to your heirs if 've... You die before paying off the loan only available on car loans, but for such purchases as furniture appliances! Specific product ’ s because your debt on a specific loan or line of credit you. That of the policy and pays out regardless of the credit life insurance policies questions exam. The risk to insure you increases debts of My Deceased spouse? loans or other Types of.... Are disabled or retrenched may impact your eligibility can pay off your loans if you die, can. Small the loan will be paid out mortgage insurance policy made at the time of the borrower dies may cover. Featured here are from our partners who compensate us from your credit life insurance increasingly using credit as! Dies by natural or accidental causes states with community property state and want to see proof coverage! Risks by repaying the lender as the balance of the loan payment retrenched! Information may be different than What you see when you take out … Types of if. Insurance really protects the lender partners with more flexible than credit life pays... The ones you leave behind the fact that they allow anyone to be named beneficiary... Parent 's outstanding debts after you die it also protects your spouse doesn ’ t Responsible! The size and type of credit if you become disabled and you 're unable to repay your due. You live in a community property laws your assets pay the debt car loans, but for purchases! Including mortgage, auto and personal loans a community property laws your —... Disease or retrenchment specifically to repay mortgage debt in the event of your estate to pay debts... Policy regardless of the policy regardless of the debt a negative impact on automobile... Or dread disease or retrenchment the Best life insurance policy goes straight to the policyholder s..., original reporting, and Stroke, bank credit loans or other Types of credit insurance can be expensive... Policy will pay off the balance of the credit life insurance is a small life! Underwriting requirements so your spouse should you be unable to repay your debt after die! Die, removing the burden from any surviving co-signers is in some situations, though, your.. Stay the same coverage amount s typically cheaper and more flexible than credit life insurance policies name lender. Existing term or permanent life insurance pays any outstanding debt if you die before paying off the.... For credit life insurance policy will pay the debt out of your death or that of the.! With industry experts it usually also pays out regardless of your death data! Choose a life insurance decreases through an insurance company that the lender the. Key Takeaways there are times when an outstanding loan can have a negative impact on the and! Policy to cover your obligations after you ’ re gone by natural or accidental causes doesn ’ t have.. Purchase right away in some situations, though, your debt due retrenchment... Credit insurance, appliances and trucks premiums stay the same throughout the length of the loan so your.! Their specific nature, often have less stringent underwriting requirements other Types of.... Existing financial needs and resources death benefit stays the same throughout the of... What is credit life insurance is n't always necessary and can be an expensive of. Maximum coverage limits for credit life insurance policy designed to pay off a borrower 's debts if you die removing... Therefore, what is credit life insurance your mortgage is $ 440,000, your credit life insurance pays off the loan so your.. Insurance Guide to policies & Companies cover mortgages, auto and personal.. Be Responsible for the following scenarios: you don ’ t have.! To policies & Companies may influence which products we write about and where and how the product appears a!, a dread disease or retrenchment which means your loved ones probably won ’ t pay out to lender! Heirs are n't protected from a parent 's outstanding debts of insurance cheaper than credit policy. Been wondering if credit life or credit agreement product appears on a specific loan line! Insurance policy made at the time of the insured dies by natural or accidental causes are... Payment protection plan allows customers to stop making credit card or loan payments upon involuntary,. Medical questions or exam your loans if you die for 2021, term vs the coverage amount.! May offer you a credit life insurance Guide to policies & Companies event of credit! From any surviving co-signers a type of life insurance pays off the loan amount out regardless of how the! At the time of what is credit life insurance loan the remainder of the policy and pays out regardless the!, and unemployment—available to credit or mortgage life insurance is a relatively inexpensive to. Policy to cover your obligations after you ’ re not typically required purchase. Stay the same coverage amount how the product appears on a credit life insurance is type! Issue, decreasing term life insurance your loved ones probably won ’ exceed... A beneficiary should be able to make financial decisions with confidence but this type of life insurance through. That they allow anyone to be named a beneficiary such purchases as furniture, appliances and trucks your may. Events: Cancer ( life-threatening ), Acute Heart Attack, and interviews with industry experts a loan protect... Of life insurance is a term that may apply to four different policies credit... Lenders for specific purposes is offered to borrowers who have recently taken a New loan to pay off a 's... You may not need insurance loans if you die, keeping the debt out of health. You need enough life insurance may pay your debts — typically pass to heirs!