What is the maximum amount of credit life insurance permitted in relation to indebtedness?

The maximum amount of credit life insurance permitted in relation to indebtedness is equal to the total indebtedness. This means that creditors can obtain credit life insurance in an amount that directly corresponds to the outstanding debt. This is designed to ensure that the insurance payout is sufficient to cover the debt in the event of the borrower's death, thereby protecting both the lender and the borrower's estate. The rationale behind this limit is to align the coverage with the actual financial obligation, preventing the provision of excess insurance beyond what is necessary to settle the debt.

Other options might suggest varying ratios or ceiling amounts, but those do not align with the principle that credit life insurance should match the debt owed for effective risk management.