All About Loans And Insurance


Who can apply for Life Insurance on Personal Loans and Lines of Credit?

Life Insurance on Personal Loans and Lines of Credit is available for consumers who have a borrowing relationship with their bank or credit union. A maximum of two borrowers can usually be insured per loan, and they can typically purchase the insurance while they are between 18 and 64 years of age (coverage usually continues until borrowers turn 70 or choose to end their coverage). While pre-existing health conditions are usually excluded from coverage during the first 12 months, a claim in the first 12 months resulting from a condition that is not pre-existing is eligible to be paid. And Life Insurance on Personal Loans and Lines of Credit typically covers all health conditions after the first year.


How do I get approved for Life Insurance on Personal Loans and Lines of Credit?

In most cases, health questions and medical examinations are not required to obtain Life Insurance on Personal Loans and Lines of Credit. For example, if the total amount of the Personal Loans and/or Lines of Credit you wish to insure is $100,000 or less, you may not be required to answer any health questions and coverage will be automatically approved. For situations where you wish to insure more than $100,000, you only have to answer a few health-related questions and no medical examination is required. If you answer ‘No’ to the health questions and your loan or line of credit is below a certain limit (typically $300,000), you’re usually approved. Answering ‘Yes’ to any of the health questions does not necessarily mean you won’t be approved; it simply means the insurer will contact you for more details.


Life Insurance on Personal Loans versus Term Life Insurance


Term life insurance can provide for your family’s future and may be an important part of your overall financial planning.


Similarly, Life Insurance on Personal Loans and Lines of Credit is a cost-effective way to help ensure that your debts will be looked after in the event of your untimely death. For many people, it provides a convenient opportunity to buy coverage as it is easily accessible at financial institutions across Canada. In addition, the amount of Life Insurance on Personal Loans and Lines of Credit is tailored to the exact amount of debt being taken on and sometimes in small amounts that may not be available in a Term Life Insurance policy.


With Term Life Insurance, the amount of coverage remains level throughout the term for which you have purchased coverage, but premiums usually increase at each renewal thereafter as you age, and these increases can be substantial. That said, one of the advantages of Term Life Insurance is that if you can buy a large enough policy, it will provide financial resources to your survivors for other things beyond paying off your personal loans.


Consumers who purchase Life Insurance on Personal Loans or Lines of Credit usually have the option to add disability and critical illness coverage, which adds further protection against not being able to make their loan payments.


How much does it cost to buy Life Insurance on my Personal Loans and Lines of Credit?

The cost of Life Insurance on your Personal Loans and Lines of Credit will be determined by your age and the amount of coverage you obtain. All types of credit protection insurance coverage, including Life Insurance for Personal Loans and Lines of Credit, are provided under a group policy rather than being individually underwritten. This means more Canadians can be insured at economical standard group rates.
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