Credit Life Insurance promises to pay your debt of the insured purchased item when you die. This Insurance is a decreasing term policy and the insurance premiums are usually added into the loan contact. This type of insurance is always optional, and it can be expensive. Your lender cannot require you buy credit life but it will be offered to you.

A Credit disability policy will make your payments if you become disabled and unable to work. This policy provides you with protection and peace of mind. The lender cannot require you buy this policy.

Although credit life and credit disability insurance may have similar features, they are not mortgage life insurance.

Always read the fine print and ask questions if something is not clear before you sign the documents.

Mortgage Life Insurance is sold by insurance companies. It is called mortgage insurance but it is really a decreasing term life insurance that will pay off your mortgage if you die. You buy mortgage life insurance to protect your survivors from having to pay the mortgage.

The premium is structured where the policy begins with a death benefit that is equal to your current mortgage balance. The death benefit decreases at the same rate as your mortgage balance. The premium payments never change but may stop prior to the loan payment. The lender may agree to add the premium payments to your monthly mortgage payment.