Insurance that is designed to pay the balance of a loan if the insured dies before the loan has been repaid in full is

Life settlements involve selling an existing life insurance policy for a lump sum that is greater than its cash surrender value but less than its death benefit. This option does not provide coverage for loan repayment upon the insured's death; instead, it represents a financial transaction concerning an existing policy.

Whole life insurance is a permanent life insurance policy that provides a death benefit and accumulates cash value over time. While it offers lifelong coverage, it is not specifically designed to pay off loans but rather provides general financial security and a death benefit to beneficiaries.

Universal life insurance is another form of permanent insurance that combines flexible premium payments with a death benefit. Although it allows for adjustments in coverage and premiums, it does not serve the specialized purpose of paying off a loan balance in the event of the insured's death, making it unsuitable for this specific need.