Credit Life Insurance

Credit life insurance repays your outstanding loan in case of your death during the loan term. Know why choosing this policy can safeguard your family from debt burden.
Check Life Insurance Policies
3 min
06-May-2025

A loan gives you power today—but who safeguards your tomorrow? Credit life insurance steps in exactly when it matters most, by ensuring your outstanding loans don't become a burden to your loved ones. This tailored form of life cover directly protects loan repayments, so your family's dreams are not disrupted if something unexpected happens to you.

What is credit life insurance?

Credit life insurance is a type of life insurance policy designed to cover the repayment of a borrower's loan in case of their untimely demise during the loan tenure. It ensures that the outstanding debt is paid off, relieving the family from financial liability.

With credit access life insurance, the lender receives the payout directly to close the loan, offering peace of mind to both the borrower and their family.

Got a home loan, car loan, or personal loan? Life insurance ensures your loved ones won’t have to shoulder it if something happens to you. Secure your peace of mind—check plans and get a quick quote!

Key features of credit life insurance you should know

Credit life insurance is more than just a loan-linked policy—it’s a built-in safeguard that travels with your loan. From group credit life insurance to individual policies, these plans are thoughtfully designed to be simple, flexible, and stress-free.

  • Easy onboarding: Most credit life policies are automatically bundled with your loan—no extra steps, no medicals, and very little paperwork. It's insurance without the usual effort.

  • Affordable premiums: Group credit life policies, especially those offered by lenders or employers, are cost-effective. You get the benefit of coverage at a fraction of the cost of a standalone life insurance plan.

  • Customisable policy tenure: You can align the policy term with your loan duration. Whether your loan is for 3, 10, or 30 years, your coverage stays in sync.

  • Loan-specific coverage: Instead of a generic lump sum, credit life insurance is designed to match your outstanding loan balance. So, it always covers the exact liability.

  • Optional riders: Some plans offer additional protection such as disability, critical illness, or job loss cover—so you’re shielded from more than just life’s uncertainties.

Credit life insurance gives you quiet confidence—knowing that your loved ones won’t inherit your debt. It’s built for ease and peace of mind.

Protect more than just yourself—protect your family from loan liabilities too. Life insurance helps your family clear your debt in case of the unexpected. Easy to compare, easy to apply. Get quote today!

Key benefits of credit life insurance for you and your family

Credit life insurance isn’t just for your lender—it protects your family too. It ensures your loan doesn’t become a burden on them if something happens to you. Let’s explore how it helps:

  • Loan repayment support for family: In case of your untimely death, the insurance directly pays off the remaining loan amount. Your family keeps the asset without struggling financially.

  • Quick claim settlement: Since the lender is the beneficiary, claim processes are often quicker and more straightforward, reducing stress during tough times.

  • Zero financial disruption: Your EMIs stop, your family isn’t burdened, and your credit history stays intact. It’s a seamless handover with no added financial pressure.

  • Helps maintain family’s lifestyle: By removing the weight of loan repayment, your family can continue their lifestyle without major compromises or selling assets.

  • Peace of mind from day one: From the moment your policy starts, you know your loan is covered. It’s a safety net that runs quietly in the background, always there when needed.

Don’t just take a loan—take protection with it. Credit life insurance gives your family the emotional and financial buffer they deserve.

Who should consider getting credit life insurance coverage?

Following are the ideal candidates for credit life insurance who should consider getting credit life insurance coverage:

  • Home loan borrowers: If you've taken a housing loan, a credit life policy ensures your family won’t lose their home in case of an unforeseen event.

  • Vehicle loan borrowers: Protect your car or bike loan and ensure your asset stays with the family, not repossessed due to unpaid EMIs.

  • Personal loan holders: These loans are usually unsecured; a group credit life policy helps protect your family from inheriting the debt.

  • Education loan applicants: Parents often co-sign these; protect them from repayment obligations in your absence.

  • Business loan takers: Entrepreneurs taking loans can secure their business continuity and ease financial stress on co-founders or families.

How does credit life insurance work?

Here's how credit access life insurance works:

  • Direct payout to lender: The insurer settles the loan balance directly with the lender on behalf of the borrower.

  • Reducing cover over time: Most plans offer a reducing sum assured that declines with the loan balance, keeping premiums cost-effective.

  • No impact on family assets: Your car, home, or business asset remains with your family, not liquidated for repayment.

  • Coverage across loan types: Be it home, education, personal, or business loans—credit life insurance adapts to any lending type.

Pro Tip

Secure your family’s future against life’s uncertainties with our reliable term plans starting at just Rs. 15/day* for a life cover of Rs. 1 crore.

Frequently asked questions

What is credit life insurance in simple terms?
It is a life insurance plan that repays your loan in case of your unfortunate death during the loan period.

How does credit life insurance help with loan repayment?
The insurer pays the outstanding balance directly to the lender, so your family doesn't bear the debt.

Who can opt for credit life insurance?
Any borrower with a home, personal, vehicle, or education loan can opt for it—often at the time of taking the loan.

How does credit life insurance protect my family?
It prevents your family from losing assets or dipping into savings to repay your loans. The insurance handles it.

What exactly is a credit life insurance plan?

A credit life insurance plan covers your outstanding loan amount in case of your untimely death. It ensures the lender is repaid, so your family isn’t burdened with loan repayment.

What does a credit life insurance policy typically cover?
How is credit life insurance different from term insurance?

Credit life insurance is loan-specific—it pays off your loan if something happens to you. Term insurance offers a fixed sum assured to your nominee, which they can use however they need.

Show More Show Less

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.

Explore and apply for co-branded credit cards online.

Invest in fixed deposits and mutual funds on the app.

Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.

Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.

Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.

Shop from over 100+ brand partners that offer a diverse range of products and services.

Use specialised tools like EMI calculators, SIP Calculators

Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

Disclaimer

*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Co. Limited , Star Health & Allied Insurance Co. Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limitedunder the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.

Show All Text