Personal and mortgage loans and associated insurance


Jean-Jacques Gauthier


Centre d'intervention budgétaire et sociale de la Mauricie (CIBES)




According to Yvan Rousseau, a sociologist who reviewed our report, this exploratory study paints an extremely troubling picture. In general, it highlights the fact that consumers are either a captive base of customers, or, at the very least, vulnerable clients. Associated insurance contracts signed in institutions as respectable as Desjardins and the major banks present a certain number of problems; after our analysis that focused on insurance associated with credit cards, or worse, with loans from finance companies, we can certainly state as a fact that consumers are being taken advantage of a finding from our preliminary study of different contracts leads us to conclude the following:
There is one global statement we can make: when the cost of insurance, whether life or disability insurance, is not calculated separately or is not clearly presented in the agreement itself, consumers probably never notice how much the associated insurance policy costs, and, moreover, will never be able to compare with other products on-the market. To put it bluntly, we maintain that in most of the cases we studied, the coverage offered by the associated insurance policies worked against the consumer's best interests.
This finding is also related to insurance associated with credit cards:
The wording in these documents is sometimes hard to understand, the different presentations make comparisons difficult and the consumer can get lost in the maze of coverage and exclusions. As for contracts signed with finance companies, our findings are decisive: Is it necessary, in light of these extremely evocative demonstrations, to denounce with futile words a situation that should not be perpetuated? This type of contract, totally exorbitant, should be prohibited. We will never emphasize enough the circumstances, in which these contracts are signed, which are particularly detrimental to consumers. The questionnaire used with 373 survey respondents enabled us to assess the level of understanding or rather the lack of understanding of insurance contracts. The interviews conducted with twenty individuals or couples clearly showed their lack of interest in insurance associated with personal or mortgage loans. If most persons interviewed thought it was important to buy insurance, they did not know what kind of contract they had signed and still believed they could trust their lending institution(s). This is a disappointing discovery that should prompt all the parties involved to be more thorough and honest in order to fully earn the trust placed in them.

This document is available in the following language(s):

Third-Party Information Liability Disclaimer

Some of the information on this Web page has been provided by external sources. The Government of Canada is not responsible for the accuracy, reliability or currency of the information supplied by external sources. Users wishing to rely upon this information should consult directly with the source of the information. Content provided by external sources is not subject to official languages, privacy and accessibility requirements.

English and French

OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

Centre d'intervention budgétaire et sociale de la Mauricie (CIBES)
274 Bureau Street
Trois-Riviere, Quebec  G9A 2M7
(819) 378-7888
(819) 376-6351

Source: Consumer Policy Research Database

Date Modified: