Credit life insurance is usually issued with which type of coverage?

Credit life insurance is typically issued with decreasing term coverage. This type of insurance is designed to pay off a borrower's outstanding debt in the event of their death, ensuring that the loan or line of credit is settled. As the borrower pays down the debt over time, the amount of insurance coverage decreases accordingly, aligning with the remaining balance of the loan.

This method offers a cost-effective solution for lenders, as the insurance premium is generally less for decreasing coverage since the risk lessens as the debt diminishes. Consequently, this helps protect the lender's interest while providing peace of mind to the borrower that their debt will be managed if they are no longer able to pay it due to unfortunate circumstances.

In contrast, the other options, such as level term, universal life, and whole life, do not match the typical structure of credit life insurance. Level term insurance maintains a fixed death benefit over the term, while universal and whole life policies involve cash value accumulation and provide a guaranteed death benefit that does not decrease in correlation with a decreasing debt.