What is the limit of the initial amount of a credit life insurance?

The limit of the initial amount of credit life insurance is based on the total amount repayable under the credit transaction. This type of insurance is specifically designed to cover the outstanding balance of a loan or debt in the event of the borrower's death. Therefore, it directly correlates to the amount that is owed at the time of the policy's issuance.

In the context of credit life insurance, the primary purpose is to ensure that in the event of the borrower's untimely passing, the debt does not transfer to surviving family members, thereby safeguarding their financial situation. This means the coverage is typically set to match the amount of the loan, which is precisely what the total repayable amount reflects.

This perspective emphasizes the protective nature of credit life insurance for creditors and, consequently, it aligns the insurance benefit with the actual financial responsibility the insured has undertaken. Other options may relate to financial concepts but do not directly serve as the limit of the credit life insurance coverage itself.