Credit life/disability insurance pays off or makes payments on a specific loan if the borrower dies or becomes disabled — priced very differently from a standalone policy for the same protection.
How it works
The monthly premium is the loan balance divided into thousands, multiplied by a per-$1,000 rate — a cost that typically declines over the loan’s life as the balance is paid down.
What this does not include
This computes the premium cost only — comparing it against what a standalone term life or disability policy would cost for the same coverage amount is the real question this calculator’s output should prompt, not something it computes itself.
How to use this calculator
- Enter the loan balance being covered.
- Enter the monthly premium rate per $1,000 of balance.
Frequently asked questions
Is credit life insurance a good deal?
It’s frequently criticized as expensive relative to standalone term life insurance for comparable coverage — comparing this calculator’s premium against a standalone quote is worth doing before buying.
Is credit life insurance required to get a loan?
No — it’s generally optional add-on coverage, though it’s sometimes bundled into a loan offer in a way that isn’t always clearly disclosed as optional.
Does the coverage amount stay the same over the loan?
Often it declines with the loan balance (decreasing term), which is why the dollar premium is typically computed against the current balance rather than the original loan amount.
