What is the primary function of credit life insurance?

The primary function of credit life insurance is to ensure that outstanding debts are covered in the event of the insured's death. This type of insurance is specifically designed to pay off loans or credit obligations, such as mortgages, car loans, or credit card debts. Upon the death of the insured, the policy pays a specified benefit directly to the lender, thereby protecting the borrower's family or estate from the financial burden of settling those debts. This mechanism provides peace of mind, knowing that their financial obligations will not become a liability for loved ones.

The other choices do not align with the main purpose of credit life insurance. General medical expenses and burial costs do not pertain to the specific aims of this type of coverage, which focuses on debt repayment. Additionally, while some insurance products offer savings or investment components, credit life insurance is strictly designed for debt protection and does not accumulate cash value or serve as a savings tool for policyholders.