Which feature distinguishes Credit Life Insurance?

Credit Life Insurance is specifically designed to pay off a borrower's debt in the event of their death. This feature is what distinctly separates it from other types of life insurance. When the insured individual passes away, the policy benefits are typically paid directly to the lender rather than to the beneficiary selected by the insured. This helps to ensure that the outstanding balance on loans is covered, protecting both the insured’s estate and the financial institution.

The other options refer to characteristics not applicable to Credit Life Insurance. For instance, while some life insurance policies do provide lifelong coverage or accumulate cash value, Credit Life Insurance does not inherently offer these features. Additionally, the notion of a minimum coverage period of 20 years does not align with the flexible and often shorter-term nature of Credit Life Insurance, where coverage usually lasts only for the duration of the loan.