Comprehensive Guide to Life Insurance for Diabetics in Canada (2025)

As one of the almost 2.5 million Canadians with diabetes (source: Statistics Canada), you may have hit some stumbling blocks or even brick walls on your search for insurance of any kind. Getting life insurance when you are diabetic can be a little less straightforward than for those without it. But, it is possible to obtain life insurance for diabetics, and it may be less expensive than you assumed.

Why does diabetes affect insurance rates?

Diabetes is a disease that affects how your body uses and produces insulin, a hormone produced by your pancreas.

As you no doubt know there are multiple types of diabetes:

Type-1 diabetes

It is also known as insulin-dependent diabetes, is an auto-immune disorder. For Type-1 diabetics, their pancreas no longer produce insulin, a hormone that helps your body convert sugar to the energy you need. You need to administer synthetic insulin to cover for the food you eat

Type-2 diabetes

People with type-2 diabetes produce insulin, but their body does not use or recognize it correctly. They can deal with the condition through oral medication or diet. Type-2 diabetes is the most common form of diabetes in Canada, with approximately 90% of diabetics living with Type-2

Gestational diabetes

It is a temporary form of diabetes associated with pregnancy. The body cannot produce an adequate amount of insulin, leading to an increase in the amount of blood sugar. In most cases, gestational diabetes goes away post-pregnancy

So why would diabetes affect life insurance policy premiums? Well, the stress of constantly fluctuating blood sugar levels puts stress on your internal organs like your heart and kidneys. The added stress means they are prone to failure in your older years, thus approving your application takes on added risk factors and adds to the cost of life insurance.

More specifically, Type-1 insulin-dependent diabetes is usually diagnosed in childhood and puts a lifetime of stress on one’s body. This is why insurance rates for Type-1 diabetics are higher.

Type 2 diabetes is more prevalent in individuals after the age of 40, and its effects can be quickly remedied by diet; organ stress is not as great of a factor in medical underwriting.

Gestational diabetes does not usually affect insurance rates, as most expecting mothers opt to do any medical underwriting before or after their pregnancy.

Can diabetics get life insurance?

Yes, diabetics in Canada can get life insurance in Canada. Diabetics who are in good health, with consistent medication levels, and who keep their blood sugar levels in control can qualify for standard, medically underwritten life insurance coverage.

In medically underwritten life insurance, the life insurance company will arrange for a blood test and likely request for a physician’s report to evaluate and screen for a pre-existing condition and grant approval for a life insurance policy. This process may provide more a higher death benefit for a lower premium, than no medical life insurance.

Much like anyone with a pre-existing health condition, no medical life insurance is another choice for diabetics. No medical life insurance is a policy that is issued without the insured having to undergo a medical exam. It usually has the added advantage of a simpler and faster issuance process that doesn’t require details for every medical condition one may have.

The two most common types of no medical life insurance are simplified issue and guaranteed issue. Read more about simplified vs guaranteed

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What are the types of life insurance available to diabetics?

In Canada, diabetics have several life insurance options, though the specifics can vary based on individual health conditions and insurance providers. Here are the primary types of life insurance policies accessible to diabetics:

Term life insurance

Term life provides coverage for a specific period (e.g., 10, 20, 30 years) and is generally more affordable than permanent life insurance.

Term life insurance may have higher premiums for diabetics depending on how well the condition is managed and overall health factors

Permanent life insurance

A permanent life insurance policy includes whole life and universal life insurance. It offers lifetime coverage with an added savings or investment component and has higher premiums than term life insurance. This may also require more stringent medical exams for diabetics

Simplified issue life insurance

Simplified issue life insurance requires no medical exam but only a health questionnaire, designed for individuals with health issues who might have difficulty qualifying for traditional life insurance. This policy typically has higher premiums and lower coverage amounts and is often easier for diabetics with well-managed conditions to obtain

Guaranteed issue life insurance

A guaranteed issue policy involves no medical exams or health questions and guarantees acceptance up to a certain age (e.g., 75 years). It has higher premiums and lower coverage amounts and often includes a waiting period (e.g., 2 years) before the full death benefit is paid out.

This is suitable for diabetics with significant health issues or those who have been declined other types of insurance

Life insurance for type 1 and type 2 diabetics

Best life insurance for type 1 diabetics

The availability of a life insurance policy for people with type 1 diabetes depends on the age of the applicant, duration of the disease, and degree of control. Traditional life insurance companies that require lab results will also seek a doctor’s statement to establish the stability of the treatment and the condition.

In most cases, a life insurance company may apply a rating (higher premium) when approving life insurance for those with type 1 diabetes. No-medical, questionnaire-based options make for an easier and faster process in such cases, albeit they offer life insurance for diabetics at higher premiums.

For no-medical questionnaires, the focus is primarily on the age of the insured, the stability of the medication, and the risk of complications. If you are older, with no change in your insulin dependence in the last 12 months and no associated complications, you can easily get life insurance with no medical exam or obligation to provide medical records.

Best life insurance for type 2 diabetics

People with type 2 diabetes can get life insurance in Canada with the possibility of standard, competitive pricing. Life insurance companies are usually more accommodating when offering life insurance to people with diabetes who do not require insulin injections.

Traditional insurance companies may even consider granting standard regular-health pricing (even more affordable life insurance) to someone who is:

  • Above the age of 50
  • Controlling their blood glucose levels and providing lab results with A1C levels
  • Undergoes regular medical check-ups with a physician or specialist
  • Is treated with oral medications that have not been increased in the past 12 months
  • Follows a diet
  • And has no diabetes diagnosis associated complications

There are also several options with no medical exam for people with diabetes who may not be able to get standard pricing or those that may want easier and faster access to life insurance.

Most no-medical life insurance questionnaires contain a few questions that seek to assess how long you have had type 2 diabetes, whether your medications have changed recently, and whether you have any complications associated with this type of diabetes. Based on simple binary questionnaires, the eligibility of life insurance for diabetics can be established fairly quickly.

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Best life insurance companies for diabetics in Canada

There are several companies in Canada that cater to individuals looking for life insurance in Canada. Here are some of the best ones to look out for:

  • Canada Life
  • Sun Life Assurance Company of Canada
  • Manulife
  • Desjardins Financial Services
  • Industrial Alliance Life Insurance
  • Beneva Inc.
  • Royal Bank of Canada (RBC)

What factors affect insurance rates for diabetes?

Several factors affect insurance rates for diabetics, as insurers evaluate risk based on how well the condition is managed and its impact on overall health. Here’s a collated list of factors that influence insurance rates:

Age

  • Your age when you apply for a policy: Younger applicants generally secure better rates due to lower perceived risk
  • Your age when you were diagnosed with diabetes: Earlier diagnosis can lead to higher rates due to longer potential exposure to complications

Type of diabetes

  • Type 2 diabetes: More common and generally considered less risky compared to Type 1 diabetes but still affects rates
  • Type 1 diabetes: Often associated with higher risk due to its complexity and potential for complications
  • Gestational diabetes: Typically resolves after pregnancy; however, if it leads to Type 2 diabetes later, it can affect rates

Severity of your diabetes or blood sugar control

  • Well-controlled diabetes with stable blood sugar levels is viewed more favorably by insurers
  • Poor control with fluctuating blood sugar levels or complications can increase risk and lead to higher premiums

Other medical conditions

  • Additional health issues can increase risk and affect premiums
  • A family history of diabetes or related health conditions can influence rates
  • Excessive alcohol consumption can impact overall health and increase insurance premiums
Cost of life insurance for diabetics

Tips to lower life insurance rates for diabetics

Lowering life insurance rates for diabetics will require you to take proactive steps to manage your condition effectively and demonstrate overall good health to insurers. Here are some tips to help reduce premiums:

  • Maintain good control of blood sugar levels through regular monitoring and adherence to treatment plans, which shows effective management of diabetes to insurers
  • Adopt a healthy lifestyle with a balanced diet and regular exercise, which can help improve overall health and potentially reduce the risk of diabetes-related complications
  • Avoid smoking and limit alcohol consumption, as these factors can negatively impact health and lead to higher insurance premiums
  • Regularly visit healthcare providers for check-ups and management of diabetes, showing insurers that the condition is being actively monitored and managed
  • Keep detailed records of your diabetes management, including medications, lifestyle changes, and doctor visits, to provide evidence of effective control to insurers
  • Compare quotes from multiple insurance providers, as different companies may have varying criteria and rates for diabetics
  • Work with an insurance expert who specializes in high-risk cases so you can find a policy that suits your specific health conditions
a1c levels affect life insurance price for diabetes

How to get life insurance with diabetes?

Getting life insurance with diabetes can be more challenging, but with the right approach, you can find suitable coverage. Here’s a step-by-step guide to help you:

Gather your medical information

  • Collect recent medical records, including blood sugar levels, HbA1c test results, and any other relevant health information
  • Prepare a list of all medications you are taking
  • Note any lifestyle changes you’ve made, such as diet and exercise routines

Manage your diabetes effectively

  • Regularly monitor and maintain your blood sugar levels within the target range
  • Follow a balanced diet, exercise regularly, avoid smoking, and limit alcohol consumption
  • Visit your healthcare provider regularly for diabetes management and check-ups

Provide accurate information

  • Submit accurate and detailed records of your diabetes management, including medications, lifestyle changes, and doctor visits, to show that you are managing your condition well

Apply for insurance

  • Complete the application process, which may include a medical exam for some types of insurance
  • If a medical exam is required, prepare by fasting if instructed, getting a good night’s sleep, and avoiding strenuous activities beforehand

Review and choose the best policy

  • Policy review: Carefully review the terms, conditions, and exclusions of your policy
  • Cost vs. coverage: Balance the cost of premiums with the coverage provided to ensure it meets your needs and budget
  • Final decision: Choose the policy that offers the best balance of coverage and affordability
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Tips from our life insurance experts:

Here are some tips from our life insurance experts for you to get the best life insurance policy as a diabetic:

  • Apply for life insurance when your diabetes is well-controlled and stable, as insurers may offer better rates under these conditions
  • If you start with a term life policy, check if it can be converted to a permanent policy later, providing more flexibility as your needs change

Why does timing matter with life insurance for diabetics?

Timing matters when applying for life insurance as a diabetic because your current health status and diabetes management can significantly influence the premiums and coverage options you receive. Here are some reasons why timing is crucial:

  • Stable condition: Applying when your diabetes is well-controlled and stable can result in more favorable premiums.  
  • Recent health improvements: If you’ve recently made positive changes to your lifestyle, such as losing weight, quitting smoking, or improving your diet and exercise habits, waiting until these changes are reflected in your medical records can lead to better rates
  • Medical advancements: If new treatments or medications for diabetes have been effective for you, showing a period of stability and improved health can work in your favor with insurers
  • Age considerations: Life insurance generally becomes more expensive as you age, so, applying when you are younger and your diabetes is under control can help lock in lower rates.
  • Health monitoring: Regular check-ups and maintaining detailed health records over time can demonstrate a consistent pattern of good diabetes management, which can be appealing to insurers
  • Temporary health issues: If you have temporary health issues unrelated to diabetes, waiting until you recover from these conditions can help you avoid higher premiums that might result from a recent illness or medical event
  • Gestational diabetes resolution: If you developed gestational diabetes during pregnancy and it has since resolved, waiting until you have a track record of normal blood sugar levels and stable health can improve your chances of obtaining better life insurance rates

Life insurance and diabetes: What can help or hurt your case

When applying for life insurance with diabetes, several factors can influence your application positively or negatively. Understanding these factors can help you navigate the process and potentially improve your chances of securing favorable rates.

Factors That Can Help Factors That Can Hurt
Stable blood sugar control: Demonstrating consistent management through stable levels can lead to more favorable premiums Poor blood sugar control: Inconsistent or poorly managed diabetes with fluctuating levels can lead to higher premiums
Healthy lifestyle: A balanced diet, regular exercise, and avoiding smoking and excessive alcohol consumption can improve overall health and lower premiums Unhealthy lifestyle choices: Smoking, excessive alcohol use, and poor diet can increase insurance costs
Recent improvements: Showing positive changes in diabetes management or overall health can be beneficial History of recent medical issues: Recent health problems unrelated to diabetes can negatively influence premiums
Regular medical check-ups: Maintaining regular visits with healthcare providers and detailed health records can help prove effective management Presence of complications: Diabetes-related complications, such as neuropathy or retinopathy, can increase perceived risk and affect rates
Age considerations: Applying for insurance while younger and with well-controlled diabetes can result in lower rates Additional health conditions: Other health issues or comorbidities can further increase risk and premiums

What are some questions insurers may ask about your diabetes?

When applying for a policy that requires a health questionnaire or physical exam, insurers will ask about your general health, lifestyle, and family medical history. They will also have specific questions regarding your diabetes, such as:

  • What type of diabetes do you have? Understanding whether you have Type 1, Type 2, or gestational diabetes helps insurers assess risk levels
  • When were you diagnosed? The age of diagnosis can impact perceived risk, with earlier diagnoses potentially affecting rates
  • Do you monitor your glucose levels regularly? Regular monitoring indicates effective management of your condition
  • Are you taking insulin, oral medication, or both? If so, provide details on the number of insulin units per day, types of medications, and dosages
  • What is your current diet and exercise routine? Your lifestyle choices can affect your overall health and diabetes management
  • What is your current A1C level? This provides insight into your long-term blood sugar control
  • What has been your average A1C reading over the past year? Consistency in A1C levels is important for assessing diabetes control
  • Have you had any other tests related to your diabetes? This includes tests for complications or related conditions
  • Who is your primary care doctor and when was your last visit? You may need to provide contact details for your healthcare team, including endocrinologists
  • Do you have any diabetes-related complications? This could include high blood pressure, vision impairment, blackout spells, or kidney issues
  • Have you been diagnosed with any other serious medical conditions? Conditions like coronary artery disease or kidney disease can affect insurance rates
  • Have you ever experienced a diabetic or insulin coma? Such events may impact your risk profile and premiums
  • Are you currently on dialysis? Dialysis indicates severe complications and can significantly affect insurance costs
  • Have you had any recent hospitalizations or emergency room visits related to your diabetes? Recent health events can influence risk assessment
  • Have you made any recent changes to your diabetes medication or treatment plan? Recent changes can affect your current health status and risk profile
  • What is your current weight, and have you experienced any significant changes recently? Weight fluctuations can impact diabetes management and overall health
  • Have you been advised by your doctor to make any lifestyle changes or undergo additional treatments? Shows ongoing medical advice and treatment adjustments

Frequently asked questions

What is the best type of life insurance for diabetics in Canada? 

The best type of life insurance for diabetics often depends on individual health conditions and needs. Generally, term life insurance may be more affordable, while permanent life insurance offers lifetime coverage and an investment component. Simplified issue and guaranteed issue life insurance policies might also be options for those who prefer not to undergo a medical exam.

Can diabetics get approved for life insurance in Canada? 

Yes, diabetics can get approved for life insurance in Canada. Approval and rates depend on factors such as the type of diabetes, control of blood sugar levels, and overall health. Insurance companies assess these factors to determine eligibility and premiums.

How much does life insurance cost for diabetics in Canada? 

The cost of life insurance for diabetics in Canada varies based on several factors, including the type of diabetes, age, overall health, and the level of coverage required. Premiums may be higher than for individuals without diabetes due to the increased risk associated with the condition.

When is the best time for a diabetic to apply for life insurance in Canada? 

The best time for a diabetic to apply for life insurance is when their diabetes is well-controlled and stable. Applying when you are younger and healthier can also help secure better rates. It is advantageous to apply after recent improvements in diabetes management or overall health.

Do all life insurance companies in Canada offer coverage for diabetics? 

Not all life insurance companies in Canada offer coverage for diabetics. Some insurers specialize in high-risk cases and may provide coverage options tailored to diabetics. It is important to compare policies and work with a broker who can help find insurers willing to offer coverage.

Can diabetics get a life insurance policy if they have been turned down before?

Yes, diabetics can get life insurance if they have been turned down before or denied coverage. Read more about your life insurance options when your application has been declined.

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What is a life insurance rider? How do they work?

As we often say – life insurance is not a one-size-fits-all product. Canadians purchase life insurance policies for a variety of reasons: to cover a mortgage loan or debt, to provide a financial cushion to their loved ones, or to cover the costs of their children’s education – in case the insured passes away. With such diversity in use cases for life insurance, individuals choose different coverage amounts and periods to align life insurance policies with their needs.

But, life insurance can be personalized even further with a life insurance rider.

How do insurance riders work?

A life insurance rider is an optional feature that can be added on to a life insurance policy to enhance and customize it to better address one’s unique needs.

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Types of Life Insurance Riders: Quick Reference Guide

Click on any rider name to jump to the full description below.

Rider Name Description
Term Rider Additional term life insurance on top of the base policy. Can be used to offer different amount of coverages for different time periods for the life insured under the base policy, or can also cover someone else, such as children
Child Term Rider Term life insurance for life insured’s children
Guaranteed Insurability Option to purchase additional coverage without medical underwriting at future specified intervals
Business Insurability Option to purchase additional insurance coverage without medicals as business value grows
Accidental Death and Dismemberment (AD&D) Additional payout upon: death of insured in an accident, or loss of limbs or body function as a result of an accident
Accelerated Death Benefit Early access to portion of death benefit in case of terminal illness
Critical Illness Lump sum payout if the life insured contracts a covered critical illness
Child Critical Illness Critical illness insurance for life insured’s children
Return of Premiums Premiums paid are returned when term ends, if no claim
Disability Waiver of Premium Premium waiver if life insured becomes totally disabled
Parent/Payor Waiver of Premium Premium waiver upon policy owner’s death or total disability
Credit/Mortgage Disability Insurance Covers all or part of the insured’s debt or mortgage payments in the event of their disability
Extreme Disability Benefit (EDB) Early access to a portion of death benefit in case of total permanent disability
Long Term Care (LTC) Payment to meet long term care expenses at insured’s home or in a facility
Hospitalization Income Daily cash payout in case of hospitalization
Fracture Lump sum payout if insured suffers a fracture in an accident

How do you add a rider to your life insurance?

Adding a rider to your life insurance application is a simple process. Once you decide what riders you wish to add to your life insurance policy, make sure they are offered by the insurance provider you choose.

There is much variation in the numbers and types of riders offered by various insurance companies. To ensure you get the right policy and type of coverage you want, we suggest enlisting the help of a licensed insurance broker. Insurance experts, like those at PolicyAdvisor, have extensive knowledge of all the riders offered by Canada’s best insurance companies, and can make certain you choose the provider which best suits your needs.

Our experienced advisors can help make sure all the appropriate riders are added to your policy application. Or if you feel confident enough to try it out yourself, we have created an easy-to-use tool for you to compare different life insurance companies and the riders and benefits they offer.

Can you add a rider to an existing life insurance policy?

Life insurance riders are typically added to insurance policies at the time of submitting the application or during the underwriting process.

While these riders may be used to enhance the quality of coverage for the applicant, they also increase the potential risk or total amount of payout for the insurance company. The insurance company underwriters, therefore, require riders to be included at the time of the application process, so any additional risk can be evaluated and priced upfront.

If you did not add a rider at the time of initiating the coverage and were looking to add the rider after the policy coverage has begun, then you will need to seek the insurance company’s approval. In most cases, you will have to repeat medical underwriting or at least complete a health questionnaire to establish continued good health, before a new rider can be added to your policy.

In some cases, a rider may not be available to be added after the policy has been initiated. Therefore, it is essential to review the available riders with your advisor and identify what works best for your needs.

Can you drop a rider from an existing life insurance policy?

Yes, you can generally drop a rider from an existing life insurance policy. Many insurance companies allow you to remove additional riders via a straightforward process.

Typically, one fills out a form indicating which rider(s) they wish to remove and submits it to their provider. The insured’s base coverage however continues, uninterrupted.

If you are paying for the rider and have dropped the rider from your coverage, then your premium will accordingly reduce too. However, there won’t be any refund for the period that you had a rider attached to your policy.

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Should I get a life insurance rider?

Insurance riders are a great way to personalize your coverage to meet your specific needs. The need for riders depends on your circumstances. For some, riders may not be necessary while for others, it presents a cost-effective way to get additional or better coverage without purchasing a separate insurance policy. For example, term riders can be a valuable and affordable tool to align coverage with your future protection needs that change with age.

Similarly, riders for accidental death and disability ensure that one’s family is adequately protected for sudden unexpected circumstances. But, this isn’t to say that all life insurance riders are worth it for everyone looking for augmented coverage. For example, if you have adequate life insurance coverage, you may not wish to add a separate accidental death rider. Or if you have a standalone comprehensive disability insurance policy, you may not see the value of adding a disability rider that waives your premium payments in the event of a disability.

Ultimately, the best way to identify which riders to choose is by determining one’s insurance needs and comparing different structures that address those needs. Speak to one of our licensed insurance agents today; they can help you figure out your insurance needs, whether you need the extra benefit that riders provide, and present you with the best avenues to get covered.

Glossary: Types of Life Insurance Riders

There are various types of riders that can be added to a life insurance policy, depending on what aspect you choose to augment in the policy. We have segregated them below into riders that either augment the life insurance coverage or provide a critical illness benefit or a disability or other income benefits.

Life insurance riders

Life Insurance Coverage Riders

What is a Term rider?

A term insurance rider is an option available to provide additional temporary life insurance cover, under the insured individual’s base life insurance policy. Term life riders are essentially an individual term life insurance policy that is shorter in term length than the base policy. Multiple term riders or life policies can be stacked on top of each other, to provide different layers of coverage for different time periods.

As the term riders gradually expire over time, the coverage and life insurance premium reduce allowing the insured individual to only pay for coverage that they truly need. This approach of using term riders is called ‘laddering’ and is particularly useful for circumstances where a higher death benefit is required in the early years of a policy e.g. while mortgage debt is outstanding. The term riders have a length smaller than the base policy e.g. you can add a Term 10 or a Term 20 rider to a 30-year policy.

What is a Child Term rider?

Child Term rider provides low-cost term life coverage for the insured’s child or children. The aim is to provide a death benefit rider, albeit of a limited amount, if one or more children of the insured pass away while the policy is in force. This rider allows the grieving parents and families to cover funeral expenses and help pay for counselling or other services.

A single child rider will usually cover all children of the insured, including any future additions. Generally, these riders offer a maximum of $20,000 to $30,000 in coverage. The rider typically covers natural-born children, adopted children and stepchildren named in the application and approved for coverage.

The child or children do not have to go through medical underwriting (no medical tests are required), though companies will ask a few questions to determine their insurability. Children are usually covered up to the age of 25 and have the option of converting the coverage into a permanent life insurance policy. These policies usually have fixed prices per $1,000 of coverage.

What is a Parent Protection rider?

A Parent Protection rider lets a policyholder take life insurance coverage for their parents as a rider on their base policy. Each parent requires a separate rider. The rider’s purpose is to cover estate costs (funeral costs, settling debts, taxes) on the passing away of the parents.

What is a Guaranteed Insurability rider?

Also known simply as an Insurability rider, a Guaranteed Insurability rider allows the insured to increase the amount of their death benefit. The amount and intervals at which it is allowed vary across different providers. This is helpful for those looking to increase their cover when achieving certain milestones like marriage, starting a family, or buying a home. This rider is also a good option for those expecting their income to increase significantly in the future, but cannot afford to pay for higher coverage or do not require a larger amount of coverage at present.

What is a Business Value Protector rider?

The Business Value Protector rider is a unique optional feature offered by a few insurance companies to help with the unpredictable rate at which a business can grow and the added coverage a business owner may therefore need over the years. The Business Value Protector rider gives a business owner the option to purchase additional coverage, without medical underwriting, based on the value of the business. It can also be used to protect other stakeholders in the insured’s business(es), to fund buy/sell agreements, or to pay capital gains tax if the business owner passes away.

What is an Accidental Death & Dismemberment rider?

The Accidental Death & Dismemberment rider (AD&D) provides additional financial protection. An additional benefit payment is made if the life insured dies or suffers a loss of limbs or bodily function (such as loss of hearing, sight) due to an accident.

Due to its narrower scope of coverage, accidental death benefit riders are usually cheaper to add than increasing the overall life insurance coverage amount on your policy. Many people use accidental death riders to augment their coverage without significantly increasing the cost of coverage or to provide additional support to their families in the event of an unexpected passing away from an accident. This rider also allows for lump-sum payments in the event of a loss of limbs or other bodily injuries. There are some restrictions and exclusions with accidental death & dismemberment riders. To receive benefits related to an accident, injuries or death generally must occur within a specified duration, generally within 180 days. This time period is usually within a few months of the accident date.

The rider usually expires once the insured reaches the age of 65. Also, the benefit is paid only if the death occurs from a covered accident and injuries are a direct result of the accident. Death or losses incurred due to self-inflicted injuries, war, or the commission of a crime are generally excluded.

What is an Accelerated Death Benefit rider?

An Accelerated Death Benefit rider helps you (life insured) access a portion of your death benefit, prior to when it would ordinarily be available i.e. prior to your passing away. Payment of an accelerated death benefit is usually triggered by an extreme health situation such as the advent of a terminal illness.

A terminal illness is defined as a serious ailment expected to result in limited life expectancy or death within a fixed time span, usually 12 months. Many insurance companies build terminal illness benefit riders into their policies, in which case a policyholder is not required to pay any extra premium. The terminal illness benefit is typically restricted to a maximum amount, which may be a percentage of the original death benefit.

Companies generally impose a limit on the amount of the accelerated death benefit to 50% of the policy amount or $250,000, whichever is less. That means if you have a $1 million policy, the amount that can be paid out in the event of a terminal illness is limited to $250,000. If the accelerated death benefit is claimed and approved, it reduces the tax-free, lump-sum paid upon the death of the life insured by the amount of the death benefit advanced upfront.

Accelerated death benefit riders may also be made available in the event of a permanent disability.

Critical Illness Benefit Riders

critical illness riders

What is a Critical Illness rider?

Critical Illness rider pays out a tax-free lump sum when the life insured is diagnosed with a covered illness (subject to certain conditions). This is known as a living benefit. With some policies, you may be able to choose the number of illnesses covered as well as the amount of coverage and the term length of the rider. Critical illness riders typically have a 30 day survival period that needs to be completed, before the policy can pay out the proposed benefit of the rider.

What is a Child Critical Illness rider?

A Child Critical Illness rider provides coverage for the insured’s children if they are diagnosed with a childhood illness. The exact list and number of illnesses covered vary across insurers. This rider can help parents cover the costs associated with treating some of the more serious children’s illnesses. Similar to the child term rider, this benefit can cover multiple children without necessitating medical tests.

What is a Return of Premium on Death or Expiry rider?

A Return of Premium on Death or Expiry rider returns all or a part of the premiums one has paid over the course of their policy when the policy term ends or when the individual passes away. Such riders are typically associated with a critical illness policy or critical illness insurance riders.

Disability Income Riders

disability riders

What is a Disability Waiver of Premium rider?

There are two types of Disability Waiver of Premium riders:

Total Disability Waiver: for the insured

Under this rider, life insurance premiums are waived if the life insured suffers a permanent total disability. This rider covers disabilities due to accidents as also those suffered due to a permanent illness. To claim under this rider, the life insured must:

  • not be able to perform essential duties of their occupation,
  • not be engaged in any other occupation, and
  • be receiving medical care for the condition that has caused total disability.

Generally, disability waiver riders only pay out after the individual has been totally disabled for at least 4 or 6 consecutive months. The premiums can be waived retrospectively, including for the initial 4 or 6 months waiting period. The rider is valid till a certain age of the person to be insured, most often up to the age of 60 or 65.

Parent/Payor Disability Waiver: for the policy owner or payor

The Disability Waiver rider can also be obtained on the policy owner or the payor of the policy. A Parent/Payor Disability Waiver rider is useful in cases where the policy owner or the payor of the policy and the insured are different people. As the name suggests, Parent disability waiver riders are usually applicable in cases where the life insured is the policy owner’s child while the payor waiver covers the individual making the payments for the policy (eg spouse paying premiums for a policy).

Depending on the policy, premiums may be waived upon the policy owner’s death or if they suffer a permanent total disability. This rider requires both the policy owner and life insured to provide proof of insurability at the time of the application.

What is a Disability Income rider?

A Disability Income rider provides monthly payments to the life insured in case they become disabled and unable to work. The policyholder will need to choose the time period for which the payments are to be made and the monthly payment (which is usually capped). This rider typically has a 30 or 90 day waiting period, with retrospective payments that start after the waiting period is over.

What is a Mortgage Disability or Credit Disability Insurance rider?

A Mortgage Disability rider covers all or part of the life insured’s monthly mortgage or line of credit payments in the event of their temporary or permanent disability. The payments are made for a specified period of time such as 2 years from disability, 5 years from disability, or up to the age of 65. Credit riders typically have a waiting period of 90 days, although can be retroactive to 31 days in the event of disability from an accident. Proof of the outstanding loan is usually required at the time of the claim.

What is an EDB (Extreme Disability Benefit) rider?

An Extreme Disability Benefit rider is available exclusively from Beneva as part of their term life insurance coverage at no additional cost. In the unfortunate event of a permanent and irrecoverable disability, you may receive a portion of your life insurance benefit (up to $250,000) in advance of your death. This rider generally expires at the age of 60.

Other Riders

What is a Long Term Care rider?

A Long Term Care rider pays out a portion of your death benefit if you are unable to live independently and require assistance (either at home or in an assisted care facility). This means you are no longer able to perform two or more activities of daily living (ADLs) independently.

What is a Hospitalization Income Benefit rider?

A Hospitalization Income Benefit rider provides a steady income if the life insured is hospitalized. The rider pays out a daily fixed cash amount. Typically, there is a limit on the number of days of hospitalization covered, as well as the total amount paid out. There may or may not be a limit to the number of claims.

What is a Fracture rider?

A Fracture rider provides a benefit if the insured suffers a bone fracture or total breakage following an accident. An applicant can purchase units of fracture coverage. Generally, different amounts are paid out depending on the nature and placement of the fracture (facial bones/ribs/skull, etc).

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What is a guaranteed insurability rider and how does it work?

We don’t know where life will take us. We may suddenly need more life insurance coverage due to events such as marriage or having another child. In a few years, we might face new health conditions or lifestyle changes that work adversely against our insurability. 

To partially solve this issue, a guaranteed insurability rider (GI rider) allows individuals to expand their prior life insurance coverage without worrying about their future health or lifestyle conditions. 

In this article, we explain GI riders and insurance riders more generally. This post also describes how GI riders work, how much they cost, and who should consider them.

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What are insurance policy riders?

Life insurance riders are an optional add-on to enhance your policy’s coverage. If your life insurance policy were a burrito, a rider would be the option to add guacamole! The variety of riders available allow you to customize your policy to further fit your bespoke needs. 

The rider availability and costs depend on your insurer, the rider details, your health, and more. Some riders include: 

  • Hospitalization income: regular payouts in case you’re hospitalized
  • Extreme disability benefit: early access to your death benefit if you face a severe disability 
  • Return of premiums: returns some of the premiums you’ve paid over the policy’s lifetime if you’ve never made a claim
  • Critical illness: A critical illness insurance rider pays a lump sum should you be diagnosed with a covered illness

What is a guaranteed insurability option rider?

A guaranteed insurability rider allows you to increase your policy’s death benefit up to a pre-determined amount, without another medical examination. At set times throughout your policy’s life, you have the option to add this additional coverage up to the pre-determined amount. This rider is excellent for those that need a policy that can accommodate future changes that they may not be able to predict. 

Although providing a medical examination to an underwriter might not be a lot of work, your premiums could skyrocket if the test discovers new health issues. If you suspect you may face future health problems through means like genetic testing or due to a history of family health issues or lifestyle choices, a GI rider might be useful to add to your life insurance policy. It’s also beneficial if you currently have a limited budget, but want to ensure that you’ll have the option for purchasing additional coverage later on, as your budgeting flexibility improves over time.

Some insurers may offer this rider on term and permanent life insurance, but it’s most common for permanent life policies.

How does a guaranteed insurability rider work?

The typical GI rider works by allowing the insured individual the option to purchase additional coverage periodically in the future, without providing new evidence of insurability (i.e. a new application or exam). The standard timeline to exercise the rider would be 5 years from the effective date of the original policy. Many policies will also allow exercising the option to purchase additional coverage upon certain life events such as the purchase of a new house, or marriage or birth/adoption of a child. Generally, you must exercise the option within a pre-defined period upon any of these life events.

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When can you buy a guaranteed insurability (GI) rider?

The availability of a guaranteed insurability rider depends on your insurer. But, the decision of whether to add it is generally decided upon when you apply for your life insurance policy. The addition of the GI rider is approved at the stage of the underwriting process. At this stage, the insurer can view the additional financial risks of providing you with a GI rider and approve the proposed costs.

The guaranteed insurability rider cannot be added after the initial policy contract is issued, so it’s important to review its need at the time of the policy application. 

For example, if during the medical exam, the underwriter discovers that you have had cancer or other condition that commonly resurfaces after years of remission, increasing your death benefit may be financially risky to the insurance company, as the likelihood that they would have to pay out the larger death benefit would be high. (Read more about how cancer affects life insurance.)

Your insurer may let you add a GI rider after this point, but it depends on their procedures.

How often can you use a guaranteed insurability rider?

There are usually two ways to apply the guaranteed insurability option — at a set number of years or upon predetermined life milestones. These are also referred to as option dates. 

Your option dates may arrive every three to five years. Or, your policy may allow you to have your option dates coincide with events such as marriage, having a child, or other significant life events. Increasing your death benefit at life milestones may be beneficial to accommodate such significant changes as your needs may change during these times. Perhaps before one of these events, such as buying a house, you had fewer liabilities, but after you want to make sure they are covered upon your death. GI riders can help cover your increasing life insurance needs.  

To calculate your insurance needs right now, try out our life insurance calculator. This calculator takes factors such as your current liabilities (debts, mortgages, credits) and determines the amount of death benefit coverage you need for full protection.

Check out PolicyAdvisor's life insurance calculator.

How much does a guaranteed insurability rider cost?

The guaranteed insurability rider is a relatively inexpensive rider to add to your policy. But some insurers may add a guaranteed insurability rider option for free. Even when there’s a charge, it’s usually inexpensive — a few extra dollars a month depending on your insurer. 

Guaranteed Insurability Rider Options

If you are looking to have $100,000 coverage added to your death benefit in the future, the guaranteed insurability rider cost varies depending on age and gender. Keep in mind that your premiums may also increase at the time you actually exercise this rider—the following prices are for the rider only, not the increase in coverage. 

 

Age Male Female
25 $3.06 $2.55
30 $3.06 $2.55
35 $3.26 $3.06
40 $10.71 $8.36
45 $21.02 $14.99

After the initial cost of adding the option of a GI, there is another cost associated with the actual exercising of the GI option when it’s available (such as the pre-determined 3 or 5 years or upon a significant life event). Your insurer ultimately increases your annual premium to accommodate the extra death benefit they will be providing. The overall monthly premium will increase to reflect the higher death benefit being made available for you. The calculation of the increase is based on the age at which you have exercised the GI option. The later you exercise the option, the higher the price of the exercise.

Who needs a guaranteed insurability rider?

A GI rider benefits you if you have prior medical conditions or family health histories that may worsen your circumstances later. If you are concerned about health issues or lifestyle choices in the future but need additional coverage, the rider lets you obtain the additional coverage without another medical examination. So, you can protect your loved ones with adequate life insurance but without a significantly higher premium, that may be associated with adverse health or lifestyle circumstances. 

A GI rider is also beneficial where you want

Riders provide numerous ways to customize your life insurance policies. A GI rider, specifically, can help you expand your coverage in the future without an additional medical examination.

PolicyAdvisor’s licensed insurance experts can help you learn more about the life insurance and rider options available to you. Book some time with us and see how you can customize a life insurance plan for you and your family’s needs.

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State of the Nation: Canadian Life Insurance Trends 2021

PolicyAdvisor’s latest research finds that only 48% of Canadians feel their insurance coverage adequately protects their families from the financial impact of COVID-19 should they become ill or pass away from the virus.

Our State of the Nation: Life Insurance Trends 2021 report takes the temperature on Canadians’ attitude towards spending, saving, job security, and life insurance in a near post-pandemic economy. 

While the data found consumers plan to trim budgets across the board in 2022, life insurance is spared from major cuts at this point in the pandemic.

Canadians know they’ll feel some pocketbook pain in the next 12 months. Cost uncertainty of pricing for items like grocery bills and mortgage rates are top of mind and may lead to spending cuts across the board.

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More insights from State of the Nation: Life Insurance Trends 2021

  • Over half of Canadians surveyed (59%) are concerned about inflation’s effect on the cost of living and rising interest rates. 
  • Job security concerns worry many Canadians (14%) facing a stalled economy. 
  • Canadians plan on spending less on entertainment (51%), travel (43%), and clothing (42%). 
  • The least expendable budget item for surveyed Canadians is life and health insurance. Eighty percent (80%) will maintain their current level of insurance protection throughout the ongoing health crisis, or even purchase more.
  • Over half (52%) of Canadians feel uncertain as to whether they have adequate financial protection for themselves or their loved ones should they be stricken with a COVID-related sickness or death.
  • The perceived expense of life insurance is a primary barrier for 45% of those that haven’t purchased life insurance.
life insurance trends 2021

Stay tuned for more in-depth analysis and breakdowns of each insurance trend in 2022. Browse the report below or download the full resolution version for free.

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The survey was conducted via Survey Monkey’s Canadian panel in November 2021 and included 500+ qualified respondents. All graphs rounded to the nearest percentage point.

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State of the Nation: Canadian Life Insurance Trends 2020 – Pandemic Checkup

Canadians are anxious right now. A global pandemic has changed the way we interact, live, and work. The State of the Nation: Life Insurance Trends 2020 – Pandemic Checkup is a follow-up to our 2019 State of the Nation. Back then we examined consumer trends and attitudes about life insurance planning across the country; but, a lot can change in a year! This year’s checkup seeks to determine consumer attitudes and buying behaviour towards life insurance coverage considering COVID-19’s impact on their lives.

Our research – which you can find below – shows that the recent Coronavirus pandemic has changed the way Canadians value life insurance and introduced an urgency to their need for coverage. Canadians are looking to protect themselves from unforeseen circumstances now more than ever, and are held back by misconceptions when it comes to extending their life insurance coverage during COVID-19.

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Majority of Canadians feeling anxious about their finances

More than 8 out of 10 Canadians with dependents feel anxious about their financial future in the face of COVID-19. This could be due to many factors including a pessimistic view on economic recovery, especially for those that have lost or are at the risk of losing employment or those needing to cash out their retirement savings at this time. As public and private debt continue to soar, austerity measures are expected in the medium term.

Hopefully, with recent news of effective vaccines on the way in early 2021, some of these anxieties will prove to be unfounded.

financial anxiety post covid-19

Almost 2 in 5 Canadians rely solely on their employer for life insurance coverage

38% of respondents stated they only have life insurance coverage through their group or workplace benefits, while 14% stated they don’t have any life insurance coverage at all.

Overall, 65% of Canadians say they rely on their group benefits for some or all of life insurance coverage. Recent research from the Conference Board of Canada suggests that 12% of companies making layoffs due to COVID-19 don’t plan on extending workplace benefits to laid-off employees. This could leave some Canadian households with a significant insurance shortfall.

Almost half of respondents say they have some sort of individually-owned coverage whether it is their sole coverage or augments the policy they have through their workplace benefits.

2020 canadian life insurance coverage source

Cutting expenses, but not premiums

Only 13% of Canadians plan on trying to save money by reducing what they spend on life insurance premiums. Instead, most Canadians plan on tightening their budget when it comes to entertainment, restaurants, travel, and clothing.

It’s safe to say that Canadians value life insurance and the security it offers in tumultuous times. However, for those Canadians that do feel the need to take a critical financial eye to what they are spending on coverage, there are ways to save money on life insurance.

They have options such as:

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What types of insurance to Canadians value most

Coverage that protects one’s life and health is considered the most essential to Canadians right now; this is understandable given the health concerns of the current pandemic.

Home and auto coverages are deemed a little less important. The devaluation of auto insurance can be attributed to more people working from home and no longer using their vehicle to commute; this has led to many Canadians choosing a lower mileage tier in their auto coverage.

Travel insurance is not highly valued at the moment with travel restrictions in place in most parts of Canada. This answer may have been different in March when COVID-19 travel restrictions were new and led to many trip cancellations for Canadians, both abroad and in their own country.

 

canadians value life insurance more during pandemic

How important is life insurance to Canadians?

Only 2% of Canadians feel life insurance is less important to own considering COVID-19, while 35% have not changed their views one way or the other.

However, almost two-thirds (63%) of Canadians now feel life insurance is more important to own than before the pandemic hit. COVID-19 has led to a majority of Canadians realizing how suddenly life-changing events can affect the financial outcome of those that depend on them.

how important is life insurance to Canadians

Are Canadians buying more life insurance coverage?

44% of Canadians plan on or have already purchased additional life insurance coverage because of COVID-19. COVID-19 has been a trigger for Canadians to purchase life insurance and a wake-up call for them to understand the state of their finances, create a budget and plan, and lock in the financial support and security they require to feel safe and sound for anything life may throw at them next.

While the other 56% of Canadians may have made no changes to their life insurance, this can be attributed to their comfort with their level of coverage and knowledge that the insurance products they’ve chosen can adequately protect them at this time.

Canadians are buying more life insurance coverage due to covid-19 graph

Barriers to purchasing life insurance

The perceived inability to purchase coverage online prevents 30% of Canadians from purchasing life insurance or adding to their existing coverage. Since COVID-19, Canadian consumers have seen industries and legacy companies adapt to the new reality of online service fulfillment. In turn, they expect insurance companies to work like e-commerce but have not seen that expectation realized.

27% feel life insurance is too expensive and 23% cite product complexity. There is a clear knowledge gap when it comes to the life insurance marketplace.

Canadians can save money and learn more about their potential policies by comparing quotes with an online broker.

Almost 12% of respondents feel buying life insurance takes too long, which can also be addressed with more modern insurance tools and practices via an online broker. 11% of respondents don’t want to participate in the exams or blood collection that can accompany medical underwriting. This speaks to another blind spot for Canadian insurance seekers unaware of the many non-medical life insurance options available.

Lastly, a lack of need prevents 36% of Canadians from purchasing any additional coverage, as they most likely already have coverage and feel no need for an additional policy.

what prevents canadians from purchasing life insurance

Customers expect insurance to work like other online retailers

Speaking to the aforementioned expectations of shoppers in the post-COVID landscape, the majority of Canadians would purchase life insurance online if given the choice. Only 21% of respondents now insist on meeting with a broker (compared to almost 30% in our previous survey).

Luckily for Canadians, online options for life insurance have increased post-COVID. Many insurance companies are approving up to $1 million in coverage (with some even going up to $2 million) without requiring a medical exam (for those below the age of 50 and in regular health).

Unfortunately, almost a quarter of respondents are not sure one way or the other if they would purchase life insurance if they complete their transaction online. More solid education from carriers and brokers around the options that are available to them could help them make an informed choice.

canadians want to buy life insurance online

Final thoughts

The biggest realization one can take away from this research is that COVID-19 has changed Canadian opinions about how much coverage they need and how they want to get it. 44% of respondents have either taken out new life insurance coverage or plan on doing so in the near future.

The appetite for online fulfillment of a life insurance policy has increased 50% year over year. Coronavirus has jump-started several industries into a new online era, and life insurance is no different. If there is any silver lining, it is the innovation in Canadian policy delivery that we have seen so far in 2020, and the even greater advances we’ll see in 2021 and beyond.

The survey was conducted via Survey Monkey’s Canadian panel in November 2020 and included 500+ qualified respondents. All graphs rounded to the nearest percentage point.

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GUIDE: COVID-19 financial relief and support in Canada

The COVID-19 pandemic has far-reaching effects on all aspects of our lives, including personal finances.

According to a survey of 2000 Canadians conducted by MNP Consulting in 2021, over 30% are on the verge of insolvency. With a wave of layoffs and furloughs, this figure has most likely increased in recent weeks. In fact, almost 1 million Canadians applied for Employment Insurance as of the beginning of April 2020 (Global News).

In times like these, Canadians are increasingly anxious about their financial future. This is a normal feeling. Many of us will need to take new and unfamiliar steps to manage our financial situations.

But there is positive news – the Canadian government announced several different relief measures for individuals, families and businesses affected by COVID-19. Keep these services and programs top of mind as you work out your financial plans in the coming months and prepare as you best you can for an uncertain year ahead.

Government Relief Initiatives

We have compiled a summary of relief measures the Canadian and Ontario governments are offering to individuals. Details of various measures are given here.

Please note that this information is not static: As the plans are fleshed out and more measures are announced, we will keep updating this list. For the most up-to-date information, you need to visit Canada’s COVID-19 Economic Response Plan website.

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Individuals

Families

  • Emergency Care Benefits of up to $900 biweekly for 15 weeks for qualifying workers and parents
  • Canada Child Benefit (CCB): An extra $300 per child through CCB for 2019-20
  • $200-250 for school supplies and online learning per child, as a one-time grant (Ontario-specific)
  • $40-60 per day for parents of school-age children with special needs (Ontario specific)
  • The filing date for Income Tax returns is deferred to June 1, 2020. Tax balances due are deferred to August 31, 2020, without any penalty
  • A one-time special payment for low- and modest- income families through the Goods and Services tax credit
  • Mortgage support: Case-by-case assistance, including no penalty mortgage deferral (see below)
  • Credit cards: Reduction in rates, case-by-case assistance (see below)
  • Renters: Freeze on evictions in most provinces

Those sick, quarantined, or in directed self-isolation

  • No medical certificate required to access Employment Insurance (EI) sickness benefits

Those facing unemployment

  • The Canada Emergency Response Benefit: a taxable benefit of $2,000 a month for up to 4 months to workers who have lost their income (see below)

Shelters

  • $50 million for women’s and sexual assault centers 
  • $157.5 million to support people experiencing housing insecurity and homelessness

Indigenous Communities

  • $305M for a new Indigenous Community Support Fund

Seniors

  • A reduction in minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, to mitigate portfolio value decline
  • Practical services: $9 million to support Canadian seniors, including grocery and medication delivery through local organizations

Students and Recent Graduates

  • Student loans: To support those with student loans during COVID-19, payments will be suspended without interest accruing to borrowers until September 30th, 2020 (read more)

Youth

  • $7.5 million in funding to Kids Help Phone, a service which offers 24/7 mental health counselling over phone calls, text and live chat to Canadian youth
credit cards canada coronavirus

Canada Emergency Response Benefits – CERB

If you have had to stop working or lost your job because of COVID-19, you should apply for the Canada Emergency Response Benefit (CERB), whether or not you are eligible for Employment Insurance (EI). 

The benefit is available from March 15 to October 3, 2020. If you became eligible for EI on or after March 15, you need to apply for CERB and it will not affect your EI benefits eligibility when the benefit ends in October.

The benefit is processed in 4-week periods. Depending on your situation, you can re-apply every 4 weeks, for a maximum of 16 weeks (4 periods).

You can apply through one of two methods:

  • Online, through the Canadian Revenue Agency’s (CRA) My Account portal
  • Offline, through an automated phone service (1-800-959-2019 or 1-800-959-2041)

Your payments will be credited through direct deposit to your bank account (most Canadian banks have updated their web portals to make this easier to set up) or by cheque.

For more details, including specific eligibility criteria, please visit the CRA’s website.

Who to contact?

  • Benefits and financial help for children and families are handled by the Ministry of Children, Community and Social Services. They can be contacted at 1-888-789-4199. (Ontario specific – other provinces may vary)
  • To apply for CERB, you need to log in to your CRA account or create one if you have not accessed it online before. The CRA also maintains a helpline where you can speak to an agent: 1-800-959-8281
  • EI: Depending on your eligibility, you can apply for EI benefits such as maternity, parental and caregiving benefits. For EI, you need to apply online.

Personal Finance

Credit cards

Most of Canada’s major banks announced they are temporarily reducing credit card interest rates to provide relief to customers during the COVID-19 pandemic.

Bank of Montreal (BMO) and Scotiabank
  • Temporarily reducing rates to 10.99% for personal and small business customer receiving payment deferrals
National Bank
  • Reducing annual interest rates to 10.99% for clients receiving three-month payment deferrals and temporary increases in credit limits on a case-by-case basis
CIBC
  • Lowering interest rates to 10.99% on personal credit cards for users who request to skip a payment
RBC
  • After an advisor completes a financial review, customers can be eligible for a 50% credit of their interest charges for a specific period of time
Desjardins
  • Temporarily reducing interest rates to 10.99% for all personal members and clients with a Desjardins credit card and who are deferring payments 

While some of these changes are automatic, in many cases you are required to call your financial institution or credit card company and request they apply these measures to your account.

Banks generally charge interest fees between 15-22% on credit cards, so this is a significant decrease. The caveat is that these deferrals do not provide debt relief and interest will continue to accrue during the deferral period.

The federal government is also exploring providing low-interest credit options to Canadians, though nothing concrete has been announced thus far.

Student Loans

The National Student Loans Service Centre (NSLSC) announced payments will be suspended without interest accruing to borrowers until September 30th, 2020 to support those with student loans during COVID-19. This is an automatic process; you do not have to apply for a deferral. You may optionally continue to make payments through your NSLSC account.

However, this is applicable to only loans issued by federal and provincial government institutions. If your student line of credit was issued by a private institution, such as one of Canada’s major banks, you will need to contact them to find out what relief measures they may offer.

Support for Renters

This varies from province to province. On March 17, the Ontario government announced that no new eviction notices will be issued until “further notice” and the enforcement of scheduled evictions will be postponed. While renters are still required to pay rent during this period, they should inform their landlord and work with them to come up with a practical arrangement if they cannot make payments at this time.

Under Ontario’s Residential Tenancies Act, landlords cannot charge fees or penalties for late rent payments.

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Mortgage Support

The federal government, through the Canada Mortgage and Housing Corporation (CHMC), is permitting lenders to allow immediate payment deferral on mortgages covered by CMHC’s mortgage loan insurance.

All homeowners currently in good financial standing with their mortgage lender can apply for mortgage relief from their lender if they have been impacted by COVID-19. This will be processed on a case-by-case basis. Mortgage deferral is not equivalent to mortgage forgiveness. Interest will accrue on any mortgage payments that are deferred, and payments will need to resume once the deferral period is complete. Even if a mortgage isn’t insured through CHMC, homeowners should contact their lender to find out their options.

The following announcements have been made by some of Canada’s largest mortgage lenders:

BMO
  • Up to a 6-month payment deferral on a case-by-case basis
Scotiabank
  • Mortgage payment deferrals are available for customers experiencing hardship
National Bank
  • Deferral of mortgage payment without accruing additional interest for 2 months. You will need to continue paying administrative charges and mortgage insurance premiums
CIBC
  • Up to a 6-month payment deferral for mortgages on a case-by-case basis
RBC
  • You may skip up to two monthly payments. For longer term relief, applications will be evaluated by financial advisors

Other Loans (Personal, Line of Credit, Auto Loan)

Most banks have announced they are offering “opportunities for relief” for these products.

Some banks, such as RBC, offer the option to immediately defer payments of principal and income for a period of up to six months depending on their needs. Depending on whether it is a fixed or variable interest product, deferred interest will be added to the outstanding loan balance, but interest may or may not be charged on the deferred portion. Contact your individual lender for up-to-date info, as the measures vary greatly across institutions.  

The effects of these measures on credit scores, if any, is still not known.

General Tips

Other General Tips for getting through this difficult time:

  • Offers via email and text require extra scrutiny. Calls and messages offering free relief from the CRA, creditors, or any other agency may be fraudulent or part of a phishing scheme aimed at acquiring your personal information. Contact the CRA, your bank, telephone service provider or any other utility directly to verify any offers or check on your account status.
  • Proceed with caution when exploring unsecured personal loans, payday loans, and other high interest sources of credit. These lenders offer huge amounts of credit with immediate availability. However, these should be considered only as a last resort when one has exhausted all other options for loans or credit; these products have multiple hidden charges, escalating late payment fees, and extremely high, cumulative interest rates.
  • The Ontario Works Program can help you with the cost of food and housing if you are in temporary financial need. This includes Emergency Assistance for those facing financial crisis due to COVID-19 or other emergency situations (such as floods, fire, etc).

COVID-19 and Financial Protection

Getting life insurance quotes and other living benefits during this time can still be straightforward with a digital broker. We’ve created some resources to help you navigate the insurance world during this current situation.

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