All of the following are true of credit life EXCEPT?

In the context of credit life insurance, it's important to understand the roles of the involved parties and the structure of the insurance itself.

In credit life insurance, the creditor (typically a lender) is the policyholder because the insurance is designed to cover the amount of a loan in the event of the borrower's death. This means that the death benefit is typically paid directly to the creditor to settle the outstanding loan balance.

The death benefit is limited to the amount of the loan to ensure that the creditor is compensated adequately without exceeding the debt. Furthermore, the premium for this insurance is often rolled into the borrower's loan payments, making it a convenient way for borrowers to pay for this coverage without making separate payments.

Given this context, saying the insured names the beneficiary is not accurate. In credit life insurance, the beneficiary is not named by the insured but rather is predetermined as the creditor. Thus, recognizing that the creditor is the one who benefits from the policy confirms that the other statements are consistent with the nature of credit life insurance.