What type of insurance is designed to pay off a debtor's obligations upon their death?

Credit Life Insurance is specifically designed to cover outstanding debts in the event of the policyholder's death. This type of insurance is often taken out to guarantee that any loans, such as personal loans, mortgages, or credit card debts, are paid off without burdening the policyholder's beneficiaries.

When an insured individual passes away, the benefit directly pays off the specified debts to the lending institutions. This feature provides peace of mind to both borrowers and lenders, ensuring that the debt does not become a financial liability to the deceased's heirs.

In contrast, Whole Life Insurance and Universal Life Insurance are types of permanent life insurance, which typically provide a death benefit and a cash value component. These are not specifically tailored to address debt obligations. Term Life Insurance, while it provides a death benefit, does not specifically focus on debt repayment and instead is intended to provide financial security for dependents. Hence, Credit Life Insurance distinctly stands out as the correct answer for debts satisfaction upon death.