Equitable Bank, a wholly owned subsidiary of Toronto-based Equitable Group Inc., has launched a new line of credit product that offers Canadians aged 50 and up another way to fund their retirement.
Through the bank’s cash surrender value (CSV) line of credit, clients can borrow up to 90% of the cash surrender value of their participating whole life insurance policy without making ongoing payments and affecting the growth of their policy.
According to the bank, 22 million Canadians currently own some form of life insurance, for a total coverage amount exceeding $4.3 trillion. As the aging population continues to grow, so too will the value of life insurance coverage. Equitable Bank estimates that the annual origination volume of life insurance secured loans will grow to roughly $1 billion by 2023.
“Canadians’ financial needs and personal retirement goals are very diverse, so it just makes sense to offer them a variety of funding options,” says Andrew Moor, president and CEO, Equitable Bank, in a statement. “The Equitable Bank CSV Line of Credit gives a growing Canadian demographic financial flexibility to retire comfortably and pursue their retirement dreams, whether that is supporting a business venture or helping a loved one.”
The CSV line of credit is initially available to Canadians aged 50 and over who have a whole life insurance agreement with Great-West Life Assurance Co., London Life or Canada Life and adequate cash surrender value available in their policy.
The product allows aging Canadians to finance a variety of needs, including expanding an investment portfolio, plans for retirement, growing a small business or financial support for family members, the bank says in a news release.
“We’re excited to partner with Equitable Bank to help people easily get the most out of what is traditionally an under-utilized asset—their life insurance policy.” says Paul Desmarais III, co-founder and executive chairman of Montreal-based Portag3 Ventures.