Which type of insurance covers credit life and credit disability?

Study for the Michigan Surplus Lines Test. Prepare with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Limited Line Credit Insurance specifically covers credit life and credit disability insurance products. This type of insurance is designed to protect creditors by paying off a borrower's debt in the event of death (credit life) or providing payments to cover loan repayments if the borrower becomes disabled (credit disability). This allows consumers to ensure that their debts are managed and protected, especially in unforeseen circumstances that may prevent them from fulfilling their payment obligations.

In contrast, comprehensive insurance typically encompasses a wide range of coverages but does not specifically focus on credit-related protections. Property and casualty insurance is primarily concerned with protecting physical assets and providing liability coverage, making it unrelated to credit products. General liability insurance is designed to protect businesses from claims of bodily injury or property damage but does not cover credit life or disability situations. Therefore, Limited Line Credit Insurance is clearly the appropriate category for credit life and disability coverage.

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