4.6.10 Credit balance insurance

Credit balance insurance is a form of insurance for your credit card. It provides two types of coverage:

• If you become injured, disabled or unemployed and have trouble paying your credit card bill, the insurance company will make the minimum payments until you return to work or until a maximum benefit is reached, whichever comes first.
• If you die or have a critical illness, the insurance company will pay off the credit card balance owing at the time of your illness or death.

Credit balance insurance is usually more expensive than regular forms of disability or life insurance. You probably don't need it if you are covered by another life insurance plan or if you think you will have enough income from other sources to make your minimum payments.

Before signing up for credit balance insurance, consider your other options. Make sure you understand the cost, the age required to qualify for benefits and the maximum amount that the insurance company will pay.

For more information, see Credit card balance insurance from the Financial Consumer Agency of Canada.