Don’t invest in Line of Credit Insurance
Photo by Garry Knight

According to The Canadian Encyclopedia, The average Canadian owes $340,000 spread over a mortgage, three lines of credit and two credit cards. However, Line of Credit insurance, like mortgage insurance, generally does not provide the consumer with a very good value. The coverage declines as your line of credit declines. Additionally, it offers the following disadvantages when compared with life insurance:    1. The coverage is not portable. If you move your line of credit from one institution to another, the coverage is not portable. If your health has changed, it may be you have difficulty re-qualify the coverage.    2. Non-smokers and smokers are priced at the same rate. With individual life insurance, non-smokers receive a discounted premium when compared with smokers.    3. Preferred rates are not available. For individuals in very good health, line of credit insurance offers an even worse value.  Preferred rates are available through most life insurance carriers for applicants who are in very good health and have good family health history. Preferred rates can translate into savings of up to 30%.    4. Coverage is not convertible. Line of credit insurance does not offer a conversion feature. Once the line of credit is paid off, the coverage terminates without value.  Individual term life insurance policies are generally convertible – meaning the insured can exchange the plan without a medical (at the best possible classification) to a Permanent plan.  This can be a huge benefit if the insured has had a change health and otherwise may find it difficult to qualify for new insurance..   5. Cash value features are not available on Line of Credit insurance. Individual life insurance policies can be sold on a term basis or a permanent basis. Permanent policies have an investment component attached to the plan, allowing the insured to have a return of premium feature.   For more details, please contact us at 1-866-899-4849 or visit our Instant Quote Page.   

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