What Is Group Creditor Life Insurance?

Group creditor life insurance is a type of life insurance coverage that can be purchased by a creditor to cover the lives of their debtors. Here are the basics of group creditor life insurance and how it works.

Group Creditor Life Insurance

When multiple individuals owe a debt together to a particular creditor, this represents a risky situation for the creditor. If those individuals were to pass away before they could repay their debt, the creditor would be out all of the money that they loaned them. In order to address this risk, creditors can purchase this type of life insurance. If the individuals pass away, the money from the life insurance policy will be paid to the business that purchased the policy. When you are dealing with large amounts of debt, this type of life insurance policy can be necessary in order to ensure the success of the business.

Group Coverage

Instead of purchasing a policy that is going to cover each one of these debtors individually, this type of insurance is sold as group coverage. This means that the company has a policy that covers the entire group of creditors as a whole instead of breaking it up into individual parts.

blog comments powered by Disqus