Life Insurance for Lines of Credit

Life Insurance for Lines of Credit

The average personal debt has gone up and to avoid high interest on credit cards, people take out lines of credit. Line of credit interest rates is generally around Prime and credit cards are at 19% and sometime even more.

There are two types of lines of credit : unsecured and secured.

A secured line of credit is backed by GICs, or the equity in your house. Secured lines of credit give you a higher limit and a lower interest rate because they lessen the risk to the bank.

Insurance is available to cover your credit line payments in the event of an injury or death. You can purchase it through the bank that you borrowed from or through an insurance company. Remember, the insurance company is truly the place where the insurance policies are made, are designed and thus offer the maximum customised benefit….and guess what, it also works out to be cheaper buying you insurance from the insurance company.

Coverage from the bank has the following shortcomings:

1. The coverage is not portable:

2. Non-smokers and smokers are priced the same,

3. Preferred rates are not available,

4. Coverage is not convertible:

5. Cash value features are not available,  


Created by: Aman Kapur



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