With standard life insurance policies, coverage exclusions can be wide-ranging and vary a great deal state by state. But because credit life insurance is focused solely on the asset and not the person, exclusions don't generally come into play, says Lynch.
However, Gaspar says one exception to that rule may be triggered by a suicide within two years of initiating the policy.
As for taxes, there's little for the consumer to worry about with credit life insurance, says CPA Ryan S. Himmel, founder of BIDaWIZ, an online service in New York that matches consumers with financial professionals.
"Since the proceeds of the insurance policy go directly toward paying off the debt," Himmel says, "and the insurance provider is essentially the beneficiary of the policy, not the family members, there wouldn't be any implications to estate or inheritance tax."