you have just purchased an automobile from a dealer and have agreed to a 4 - year auto loan. you are also…

you have just purchased an automobile from a dealer and have agreed to a 4 - year auto loan. you are also offered a 4 - year life insurance policy that would pay off the loan in the event that you died. which of the following best describes this type of policy? a. whole life insurance b. universal life insurance c. credit life insurance d. term life insurance

you have just purchased an automobile from a dealer and have agreed to a 4 - year auto loan. you are also offered a 4 - year life insurance policy that would pay off the loan in the event that you died. which of the following best describes this type of policy? a. whole life insurance b. universal life insurance c. credit life insurance d. term life insurance

Answer

Brief Explanations:

Credit life insurance is designed to pay off a borrower's debt in the event of their death. In this case, the life insurance policy is intended to pay off the auto - loan if the policyholder dies during the 4 - year term, which is characteristic of credit life insurance. Whole life insurance provides lifelong coverage and has a cash - value component. Universal life insurance is a type of permanent life insurance with flexible premium payments and a savings element. Term life insurance provides coverage for a specific term but is not specifically tied to paying off a debt like credit life insurance.

Answer:

C. Credit life insurance