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RRSP Loan insurance

Insurance is there because no one wants to worry about their finances in case of accident, illness or even death! A good insurance plan can make a significant difference for your loved ones and yourself when faced with adversity. It can help you reach peace of mind and the freedom needed to recover. Get the insurance plan that will help you and your family cope with an accident, illness or death.

WHAT IS LIFE INSURANCE?

Simply put, life insurance guarantees that the insured amount of your loan will be paid to your beneficiary upon your death. Also, the premium is included in your mortgage instalments so you don’t even have to think about it. Protect your loved ones today so they can maintain their way of life should you pass away. For example, if you were to be victim of an accident1 resulting in blindness, the principal of your mortgage would be 100% reimbursed by this insurance plan. The table below details damages covered by this insurance plan.

WHAT IS DISABILITY INSURANCE?

In case of inability to perform your professional duties as a result of illness or an accident, your disability insurance will automatically reimburse your loan. You can therefore take advantage of your savings to tend to more urgent needs such has hospital bills, transportation and professional care.

WHY WAIT!

Why wait if you’re in good health right now. Accidents and illness can happen very quickly and you never now when your health will begin to wane. The more you wait, the higher the premium. For example, at 36 years of age, you could benefit from a life and disability insurance coverage for as little
as $6.64 per month on a $5,000 loan with a 5-year term... that’s only $0.22 per day!

TABLE
Loss Life insurance percentage
Sight2 of both eyes 100%
Both hands3 or both feet3 100%
One hand3 and sight2 of one eye 100%
A foot3 and sight2 of one eye 100%
One hand3 and a foot3 100%
One arm4 and one leg4 100%
Hearing2 and speech2 100%
One arm4 or one leg4 75%
One hand3 or a foot3 67%
Sight2 of one eye 67%
Hearing2 or speech2 50%
Thumb and index5 of one hand 33%
Use6 of both arms or both hands 100%
Use6 of both legs or both feet 100%
Use6 of one arm or one leg 75%
Use6 of one hand or a foot 67%

 

CHARACTERISTIC
  Life insurance Disability insurance
Eligibility The eligibility criteria are as follows:
  • Be aged between 18 and 65;
  • Be in good health;
  • Be the borrower, the co-borrower or the guarantor
  • In case of a joint loan, when both parties are insured, you benefit from a rebate because the premium will be equal to that of the eldest insured times 1.5. There is no limit as to the number of people insured.
The eligibility criteria are as follows:
  • Mandatory subscription to life insurance;
  • Be aged between 18 and 59;
  • Be in good health;
  • Have held a remunerated job, minimum 20-hour per week, for the four weeks prior to the application;
  • Loan repayment must on a monthly basis.
Insurable amount The maximum insurable amount of the loan is $750,000. The maximum insurable amount is $2,500 per month, for a period no longer than 60 months for each disability without limitation as to the number of disabilities. (Please note that arrears, property and school taxes are not covered by this insurance.)
Premium type The premium is payable in a lump sum upon signing the loan and is based on the following:
  • The premium is based on the age of the borrower and the initial amount of the loan.
  • The premium can be financed or not.
The premium is payable in a lump sum upon signing the loan and is based on the following:
  • The premium is based on the age of the borrower and the initial amount of the loan.
  • The premium can be financed or not.
Insurance termination Insurance is terminated at the first occurrence of the following:
  • The borrower reaches 70 years of age;
  • The loan expires;
  • The loan is refinanced;
  • The loan is in default;
  • The insurer pays a death claim for the loan;
  • The loan is closed.
Insurance is terminated at the first occurrence of the following:
  • The borrower reaches 65 years of age;
  • The loan expires;
  • The loan is refinanced;
  • The loan is in default;
  • The loan is closed.
Waiting period There is a 30-day waiting period before the first benefit payment is issued in the case of an accident and 90 days in the case of disability. (Note that insurers must be in possession of material supporting the claim.)
Accidental dismemberment insurance This coverage is included with your life insurance. Refer to the table of losses for the benefits paid. They vary from 33 to 100% of your loan balance.Il n’y a pas de limite pour le nombre de personnes à assurer.
Available options Insureds can be covered for:
  • Life insurance only;
  • Life insurance combined with disability insurance.
There is no limit as to the number of people insured.



Summary

The insurance is suited for you if:

  • You want peace of mind;
  • In case of disability, you want to insure that your loan obligations are honoured;
  • You want to make it easier for the people handling your estate after your death and eliminate unwanted delays;
  • You want to keep your savings intact while honouring your loan payments should you become ill or sustain an accident;
  • You want to protect your savings or those of your beneficiaries should you pass away.


1. Accidental injury: bodily injury arising from the violent, sudden and unforeseen action of an external cause independent from any other cause.
2. Hearing, sight or speech loss: total and definite loss of hearing, sight or speech authenticated by a certified doctor, recognized and approved by the Royal Canadian College of Doctors and Surgeons.
3. Loss of one hand or a foot: complete amputation to the wrist or to the ankle or above but under the elbow or the knee.
4. Loss of an arm or a leg: complete amputation to the elbow or the knee or above.
5. The index: the finger closest to the thumb.
6. Loss of use: total and definite loss of a body part linked to a continued disability for that body part for 12 months or more.