8 benefits of credit insurance

8 benefits of credit insurance

What would be the impact on your family if you were to die while you still have a mortgage in the thousands of dollars?

That’s where credit insurance steps in, providing numerous benefits that will allow you to rest easy.

1. A benefit payment in the event of disability or critical illness

Credit insurance doesn’t offer protection only in the event of death.

It can also cover total disability or critical illnesses such as cancer, heart attack or stroke.

Total disability

Provides a monthly indemnity to help you meet your loan payments.

Critical illness

Provides a tax-free amount to help lighten your financial load.

It is up to you how you use the amount: to pay for medical care not covered by a group or government plan or to cover everyday expenses, for example.

Above all else, it can help you invest entirely in restoring your health.

2. Security for your beneficiaries

In the event of your death, the beneficiaries you have designated will receive a benefit payment.

This is not the case with a bank’s mortgage insurance: since the bank owns the insurance policy, the bank is the policy’s beneficiary and inherits the insurance amount on your death which it uses to pay off the outstanding debt on your mortgage.

3. A flexible insurance amount

The insured amount can be changed later on, since some contracts contain a guaranteed insurability benefit. You can opt to keep the amount fixed, regardless of your decreasing mortgage balance or to increase it, for example, if you buy a new, more expensive, house.

What is more, you can select an insurance amount that covers all your debts (line of credit, car loan, credit cards, personal loan, etc.), and not just the remaining balance on your mortgage.

4. Fixed premiums

The premiums remain fixed over the life of the policy (providing you don’t increase the insurance amount), regardless of the renewal rate, your age and your state of health which may decline with the passing years. Renewal premiums are known in advance and are usually guaranteed during the chosen term.

This protects you and your pocket from unexpected surprises.

5. An uninterrupted contract

What if you switch bank to get a better interest rate? In this case, your credit insurance simply carries on with you.

This avoids the need to reapply for insurance which involves a health check and meeting selection criteria.

6. Convert your insurance

You can opt to convert your credit insurance to permanent life insurance.

You won’t be asked to undergo a medical examination in order to modify your coverage.

7. Complementary protection

Enhance your credit insurance with the addition of other insurance products for more extensive coverage:

  • Disability insurance
  • Critical illness insurance
  • Life insurance for your children

8. Assistance services included

Your credit insurance contract includes an assistance service at no cost with Disability and Critical Illness Coverage when these benefits are added to your credit insurance policy.

This gives you 24-hour telephone access to the following services:

  • Medical assistance
  • Medical referral
  • Convalescence assistance
  • Psychological counselling
  • Legal assistance

Help seeing the bigger picture

Before purchasing credit insurance, speak to your advisor who will be able to analyze your needs and find the product that is just right for you.

Note: This blog post is provided for information purposes only. It is not a substitute for professional legal, financial or fiscal advice. For advice specific to your personal situation, always speak with your advisor. SSQ Insurance cannot be held responsible for any decision made as a result of reading this blog post.