Equitable Bank CSV Lines of credit


By: Michael Pilz, Senior Business Development Manager, CSV Lines of Credit, Equitable Bank

Life insurance policies can represent a significant and untapped source of capital. While life insurance is often strictly thought of as a death benefit, permanent policies that have a cash component can be leveraged to secure a line of credit. Thinking of insurance differently – and communicating how it can be used to create a living benefit – can open up a world of possibilities for your clients, especially during these trying times.

Equitable Bank CSV Lines of Credit:
Equitable Bank Cash Surrender Value (CSV) Lines of Credit have been designed to allow your clients to easily convert the value of their insurance policy into tax-free cash 1 while keeping their policies intact and growing. At a current interest rate of 3.70% (Prime + 1.25%) 2, and options with no required monthly payments 3, Equitable Bank’s CSV Lines of Credit may be an attractive liquidity option for your clients.

Below are a three common use cases where our borrowers have used CSV Lines of Credit:

  1. Source of Liquidity

    With most businesses slowing down, many Canadians are facing reduced incomes and cash flow. In almost all cases, using a CSV Line of Credit for liquidity is wiser than selling investments in a bear market, and it keeps asset bases intact. These revolving lines of credit may be a suitable option for borrowers who need a lump sum, cash flow injection for daily expenses, and also for those who are looking for a “just in case” option.

  2. Replace existing, higher cost debt

    Another way to help your clients mitigate the economic downturn is to help them pay down their higher cost debt. CSV Lines of Credit have a current rate of 3.70% (prime + 1.25%)2 and if clients elect for the CSV FLEX Line of Credit, no monthly interest or principal payments are required.

  3. Make premium payments to keep policies in place
    Set up a CSV Line of Credit to fund premium payments. Lapsed policies due to difficulty meeting premium payments could cause clients to forfeit death benefits, as well as face potential tax consequences. Equitable Bank CSV Line of Credit products have flexible advance options, and interest is calculated only on the drawn portion.

You can learn more about the Equitable Bank CSV Line of Credit product suite by visiting our website https://www.equitablebank.ca/lines-of-credit/csv , or feel free to reach out to me at mpilz@eqbank.ca.

1 Consult with your client to discuss their unique tax situation and the tax-free benefits of an Equitable Bank CSV Line Credit.

2 Variable annual interest rate based on the Equitable Bank CSV Prime Rate as at April 27, 2020.

3 The Equitable Bank CSV Line of Credit is a demand credit facility, meaning Equitable Bank can demand payment of all or part of the outstanding balance at any time. The outstanding balance of your loan must remain below 95% of the cash surrender value of your policy.

About Equitable Bank
Equitable Bank manages over $33 billion in assets and is a wholly-owned subsidiary of Equitable Group Inc. It was founded in 1970 as The Equitable Trust Company and has become Canada’s ninth largest Schedule I bank. Equitable Bank offers a diverse suite of residential lending, commercial lending, and savings solutions, including high-interest savings products and GICs.