What type of life insurance pays the amount due on a loan if the insured dies before the loan is repaid?

Credit Life Insurance is designed specifically to pay off the balance of a loan in the event that the borrower dies before the loan is fully repaid. This type of insurance is often taken out in conjunction with personal loans or mortgages, providing peace of mind for both the lender and the borrower. If the insured passes away, the policy pays the lender directly, ensuring that the loan does not become a burden on the borrower’s family or estate.

The other types of insurance mentioned serve different purposes. Juvenile Insurance is intended for insuring the life of a child, often to provide a death benefit or cash value accumulation for future use. Family Plan Policies generally cover multiple family members with a single policy, which is more about providing life coverage for a whole family rather than specifically addressing loan obligations. Adjustable Life Insurance provides flexibility in premium payments and death benefits, but it does not specifically cater to the needs of loan repayment upon death. Through understanding these distinctions, it becomes clear why Credit Life Insurance is the appropriate choice in the context of loan coverage.