New Jersey Life Insurance Exam Practice Question
Insurance purchased on the life of a borrower to provide indemnity for a loan balance if the borrower dies is referred to as
Correct Answer: B
Rationale: Credit life insurance specifically covers the loan balance in the event of a borrower's death, ensuring that the debt does not burden the borrower's estate or family.
Option A, bank insurance, is a vague term that does not specifically address life insurance related to loans.
Option C, ticket life insurance, is not a recognized type of insurance and seems to be a misnomer.
Option D, liability indemnity insurance, pertains to protecting against legal liabilities rather than covering debts related to personal loans. Thus, credit life insurance is the most accurate term for this type of coverage.
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