Fees and borrowing costs
Credit Card Balance Protection Insurance in Canada: Is It Worth It?
Balance protection insurance makes your card payments if you lose your job, become disabled or die, for a monthly premium based on your balance. What it covers, the exclusions, and how to cancel.
What is credit card balance protection insurance?
Optional insurance sold with a credit card. If you lose your job, become disabled, are seriously ill or die, it pays your minimum payments or part or all of your balance, depending on the policy.
The premium is usually charged monthly as a percentage of your statement balance, so it costs more when you carry a bigger balance.
Put it into practiceCredit card interest explainedCan my bank add it without my agreement?
No. Federally regulated institutions must get your express consent before providing optional products like balance insurance, and must tell you what it covers, how long the agreement lasts, what it costs and how to cancel.
What does it usually not cover?
Policies have important exclusions. Common ones include pre-existing medical conditions, self-employment or part-time work, quitting or being fired for cause, and waiting periods before benefits start. Read the certificate of insurance before you rely on it.
Is it worth it?
For many people, no. If you pay your balance in full each month, there is little to insure. If you carry a balance, compare the premium with paying the debt down faster, and check what your employment insurance, workplace disability or life insurance already covers.
How do I cancel it?
Call your card issuer or use its online banking. You have the right to cancel at any time. Many banks offer a “free look” period, during which they refund all premiums if you cancel; your disclosure documents state how long it lasts.
Keep reading
Fees and borrowing costsAre Credit Card Annual Fees Worth It in Canada?Compare a card’s extra annual fee with additional usable rewards and benefits, using a Canadian-dollar break-even example.- Fees and borrowing costsHow Does Credit Card Interest Work in Canada?Understand APR, purchase grace periods and a monthly interest approximation before comparing card rewards.
Fees and borrowing costsStatement Balance vs Current Balance on a Credit Card in CanadaYour statement balance is what you owed when the statement was issued; your current balance includes everything since. Which one to pay to avoid interest, and how each affects your credit score.- DebtHow to Pay Off Credit Card Debt in CanadaFive ways to pay off credit card debt in Canada, with the math: paying $400 a month on $7,500 across three cards clears it in 1 yr 11 mo; the minimum only would take 24 yrs 10 mo.
Official sources and further reading
Terms vary by product. Confirm the provider’s current terms before acting. This guide does not predict approval, realized value or credit-score changes. How WalletReturn calculates value