Credit insurance repays some or all of a loan when certain circumstances arise to the borrower such as unemployment, disability, or death.
· Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name “credit insurance” more often is used to refer to policies that cover other kinds of debt.
· Many credit cards offer payment protection plans which are a form of credit insurance.
· Trade credit insurance is business insurance over the accounts receivable of the insured.
The policy pays the policy holder for covered accounts receivable if the debtor defaults on payment.