Final answer:
The false statement about Credit Life Insurance is that the amount of coverage depends on the duration of the loan, when in fact it is related to the remaining loan balance.
Step-by-step explanation:
The statement that is false regarding Credit Life Insurance is:
D) The amount of coverage is dependent upon the duration of the loan.
Instead, the amount of coverage is typically tied to the remaining balance of the loan, not the duration. As the loan balance decreases over time, so does the amount of coverage. Credit Life Insurance is designed to pay off the balance of a specific loan if the debtor passes away, thus protecting the debtor's family from the burden of debt; therefore, the insurance proceeds must be applied to the discharge of the loan by the creditor. Debtor may also cancel the insurance if a loan is prepaid or refinanced, offering flexibility in the case of changes to the financial arrangement. Additionally, it is typically the individual who pays the insurance premium monthly, and this cost can be included in the loan's payments.