Which of the following describes Credit Disability Insurance?

Credit Disability Insurance is specifically designed to protect borrowers by ensuring that their loan payments are covered if they become disabled and are unable to work. This type of insurance typically means that, in the event of a disability, the insurer will make payments on behalf of the insured directly to the lender, which may prevent the borrower from defaulting on the loan.

In contrast, the other options do not align with the purpose of Credit Disability Insurance. Hospital bills are taken care of through health insurance rather than disability insurance. Income support during unemployment is generally covered through unemployment insurance and not linked to a borrower’s disability status. Lastly, life insurance provides a financial benefit to beneficiaries upon the death of the insured, which is unrelated to disability coverage for loan payments. This distinction highlights the specific protective nature of Credit Disability Insurance for borrowers facing unexpected disabilities.