The type of insurance that pays off your credit balance if you become ill or die is credit life insurance. This form of insurance is specifically designed to cover the outstanding balance on a borrower's credit accounts in the event of the insured's death, ensuring that their family or estate is not left to deal with financial burdens resulting from unpaid debts. If the borrower becomes ill and is unable to work, some policies may also provide benefits to cover payments, but the primary coverage focuses on life events.
Credit accident insurance, in contrast, typically provides benefits in the event of an accident that prevents you from making payments, rather than dealing with health conditions or death. Liability insurance is not relevant in this context as it generally protects against claims resulting from injuries and damages to other people or property, rather than ensuring debt payments. Debt cancellation insurance can cover monthly payments under certain conditions, but it does not specifically address the pay-off of a credit balance due to death or specific illnesses as clearly as credit life insurance does.
Thus, credit life insurance is the most fitting option as it directly addresses the concern of outstanding debts after the death of the insured or inability to work due to serious illness.