It’s hard to predict what will happen after you take out a loan. In the worst-case scenario, you could lose your job, have an accident or get critically ill and be unable to work. Loan insurance is designed to cover your loan payments if you can’t make them \u2013 but it can be expensive and may not be worth the cost, depending on your budget.<\/p>
Loan insurance (also known as credit insurance) is a form of insurance coverage that will pay off your loan or help you make your loan or credit card payments if you experience job loss, critical illness, a serious accident or some other covered emergency. It’s designed to prevent default and to protect your credit score<\/a>. It typically lasts the lifetime of your loan.<\/p> Your lender might suggest loan insurance if you have less-than-perfect credit or are over the age of 65, but it’s 100% optional. You should never feel pressured into buying it, and it should not be used as a condition to approve your loan. The only exception to this rule is mortgage insurance since you legally need to buy it if you have a down payment of less than 20%.<\/p> Loan insurance can come in many shapes and sizes, but a few of the more common types of insurance include the following:<\/p>What are the different types of loan insurance available in Canada?<\/h3>
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