Health insurance

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if you need additional health insurance

Provincial and territorial health plans cover most of your basic health care needs. Additional health insurance products, such as private or supplementary health insurance, may help you:

• pay for services that aren’t covered by your regular health care plan such as special nursing services, ambulance services, wheelchairs and other durable equipment
• supplement your income if you suffer a major illness or severe injury
• pay for your medical expenses if you become ill while travelling

Before buying additional health insurance, check your employer’s benefits plan to make sure that you don’t buy coverage you already have. For example, you may already have coverage for glasses or dental work through your employer’s plan.

Check your policy to find out if:

• there is a deductible, which is the amount of your claim that you agree to pay before the insurer pays the rest
• the amount your insurer will pay is limited to a percentage of the claim
• the amount your insurer will pay is limited to a maximum annual amount

Who your health insurance policy covers

Your health insurance policy covers you if the policy is in your name.

Your spouse or partner and children under 19 years old may also be eligible for coverage under your insurance policy. Children over 19 may be eligible for coverage under your policy if they are still in school or if they are disabled.

Travel medical insurance

If you plan on travelling outside Canada, you may want to get travel medical insurance to pay for medical treatment while in another country.

Your policy may not provide coverage for medical conditions you had before applying for insurance. Read your policy carefully.

Travelling within Canada

If you’re travelling within Canada, an agreement exists between the provinces and territories to provide you with a certain amount of medical coverage.

Quebec participates in this agreement only for hospital fees. Quebec residents should check their health plans for any limitations before travelling outside their home province.

when buying travel medical insurance

Before you get any insurance policy, read it carefully to learn about any exclusions, including those related to pre-existing conditions. An exclusion is a condition not covered in your policy.

Make sure you understand what your policy does and does not cover. Health insurance can be complex, you may want to consult an insurance advisor.

Learn more with the Canadian Life and Health Insurance Association’s Guide to Travel Health Insurance.

Car insurance

Who a car insurance policy covers

If you get into a car crash, your insurance may cover:

• ​the driver
• all passengers
• other people who are involved

In some provinces, injured passengers or other people involved in the accident who have their own insurance policy must make a claim under their policy first.

The principal driver is the person who drives the car most often.

Additional drivers are other drivers in the household who may use the car as part of their routine, such as driving to school or work. Your insurance policy must list additional drivers. If additional drivers have a poor driving record, your premiums may increase.

Occasional drivers are drivers who only use the car from time to time.

What a car insurance policy covers

Coverage is the maximum amount of money the insurance company will pay you if you make a claim for a loss or an event covered by your policy.

Mandatory insurance coverage

Canadian provinces and territories require drivers to have mandatory coverage. Some provinces may require more coverage than others.

Liability insurance

Liability insurance covers losses, such as injury or death, which your vehicle causes to other people. It also covers damage your vehicle causes to other vehicles. If the cost of the losses or damage is more than your liability limit, you’ll need to pay the balance of the settlement yourself.

Liability insurance does not cover the cost of repairs to your own vehicle. You may need to consider additional insurance to cover these costs.

Accident benefits/bodily injury insurance

Accident benefits cover the cost of your own medical expenses and loss of income when you’re in a car accident.

In Quebec, you’re automatically enrolled for insurance that covers bodily injury. Premiums are paid as part of your driver’s licence registration. You don’t need to buy extra coverage for this.

Additional insurance coverage

Your car insurance policy may also provide you with additional benefits.

Collision insurance

Collision insurance covers the cost of repairing or replacing your car if you hit another car or object. This is sometimes included with your mandatory insurance coverage.

Ask your insurance company what coverage your policy provides.

Comprehensive insurance

Comprehensive insurance covers the cost of repairing or replacing your car due to other types of damage or loss. This may include:

• vandalism
• damage to your windshield
• theft

Comprehensive insurance doesn’t cover loss or damage to your car if you hit another car or object in a collision.

Ask your insurance company what coverage your policy provides.

Optional insurance coverage

Depending on your driving record, you may not be eligible for all types of optional insurance.

You can to buy extra insurance to pay for risks not covered in your basic policy. Insurance companies call this a rider or an endorsement. You’ll pay extra for this.

You may also want to consider if you’d need additional insurance coverage for:

• renting a car or using alternate transportation while your car is being repaired
• repair to physical damage to a rental car
• emergency road-side assistance
• collision forgiveness which keeps your premium from increasing following the first accident for which you’re at fault
• depreciation to make sure you receive the full value that you paid for your car

Ask your insurance company what your policy covers and does not cover. Ask for what risks you might need extra coverage.

What a car insurance policy does not cover

Most car insurance policies don’t cover the loss of personal possessions, such when a thief steals golf clubs, clothing or personal electronics from your vehicle. Your home or tenant’s insurance usually covers these losses.

Check your home insurance policy to find out if it provides coverage for the theft of personal items from your vehicle.

Read your car insurance policy carefully. Always make sure you understand what it does and does not cover. Keep it in a safe and accessible place. Refer to it when needed.

Learn about what home insurance policies usually cover.

How an insurance company calculates premiums

Premiums are the amount you pay to buy insurance.

When determining how much you’ll pay for premiums, insurance companies may consider factors such as:

• your age
• your gender
• where you live
• what car you drive
• how much you use your car
• your driving record
• your claim history
• the type of coverage you choose
• the amount of your deductible

A deductible is the amount of your claim you agree to pay before your insurance company pays the rest.

Shop around for the lowest insurance premiums

Your premiums will vary from one insurance company to another. It’s important to shop around, ask for quotes, and compare prices before deciding on one insurance company. In some cases, you may be eligible for a discount by combining your home and car insurance.

When shopping for a car, check the insurance rating for the car you’re thinking of buying. Insurance companies assign ratings based on the claims made on different makes and models. Cars with better ratings are cheaper to insure. You can get rating information from:

• Insurance Bureau of Canada’s Consumer Information Centre
• your insurance company, broker or agent

In most provinces and territories, an insurance company can charge higher premiums based on your credit rating.

Learn how your credit rating may affect your premiums when shopping around for insurance.

What to do if your car insurance premiums increase

In some cases, your car insurance premiums may increase.

Re-evaluate your needs

Review your insurance needs with your insurance company. You may want to consider asking about the following options for lowering your car insurance premiums:

• raising your deductible
• dropping collision coverage if your car has a low resale value
• a package deal for insuring your home and car, or more than one car, with the same insurance company

Shop around

Shop around, get quotes and compare prices from different companies and brokers to make sure you’re getting the best deal.

Life insurance

 if you need life insurance

Life insurance can help your loved ones deal with the financial impact of your death.

The death benefit paid from a life insurance policy is a tax-free, lump-sum amount that can be used to:

• replace your income so your family can maintain their standard of living
• provide for your children or dependents
• pay for funeral expenses
• pay off your debts
• make a gift to charity

You may also choose to leave the money to your estate or to a trust.

Term life insurance

Term life insurance pays a death benefit if the person insured dies within a specific period of time or before you reach a certain age.

The length of your coverage can be either for:

• a fixed period of time, such as a term of 10 or 20 years
• until you reach a set age, such as 65 years old

If you die within the duration of the policy, your beneficiaries will be paid the death benefit. Once the term ends, the coverage ends and your beneficiaries don’t receive any payment.

Term insurance policies don’t include cash value. This means you can’t borrow against your policy and you won’t get any cash value back if you cancel your policy. Some term policies can be renewed.

Generally, your insurance company will establish your premiums, or the fees you pay, for the length of the term. Your premiums may increase when you renew the policy. For example, premiums would increase every five years on a five-year renewable policy.

If you don’t pay your premiums, your insurance company may cancel your policy.

Term life insurance premiums are generally less expensive than permanent life insurance premiums when you first buy the policy.

Term life insurance options for couples

When considering buying life insurance as a couple, look at what coverage you may already have through your employer or that you may have bought when you were on your own.

If you decide to purchase insurance, make sure you consider all the options available to you as a couple. Make sure to consider the pros and cons of each.

Joint first-to-die term insurance

• Insures two people under one joint policy
• Pays the death benefit when the first partner dies
• Gives each partner the same coverage
• Is usually less expensive than two identical single policies
• Is sometimes less flexible than single policies if the couple separates or gets divorced
• Usually can’t be divided
• Usually pays only one death benefit, so if one partner dies, the other needs to apply for a new policy to continue coverage

Single term insurance

• Provides each partner with their own policy
• Gives each partner their own coverage amount
• Is usually more expensive in total than a joint first-to-die policy
• Makes it relatively easy to change the beneficiary, if you separate or divorce

Permanent life insurance

Permanent life insurance gives you coverage throughout your lifetime. Your survivors will get payment if you die at any time while your insurance policy is in effect.

Permanent life insurance policies build up a cash value. This means you’d get a cash value back (less than the amount you paid in premiums for the insurance costs) if you cancel your policy.

You may be able to take out a policy loan or use your life insurance policy as collateral for a loan. If you borrow using your cash value and don’t repay the loan, it may reduce the amount of money your beneficiary will receive or that you may get back if you cancel.

Whole life insurance

Whole life insurance is a type of permanent life insurance that provides you coverage for your life time.

Your premiums won’t change as you get older. Your policy will often have a guaranteed minimum cash value.

Universal life insurance

Universal life insurance is a type of permanent life insurance that combines life insurance with an investment account. The investment account has a cash value. Withdrawals, as well as loans, may be permitted.

The death benefit and cash value of your investment account may increase or decrease depending on the:

• types of investments you choose to hold in your account
• returns on those investments

You can also select how your premiums are invested. You can increase or decrease your premiums within the limits specified in your insurance policy. However, your premiums could increase if returns on your chosen investments fall.

Naming a beneficiary

A beneficiary is the person you name to receive payment from your insurance policy when you die. You can name your spouse, another family member, friend or charitable organization as beneficiary.

You can name more than one beneficiary for your life insurance policy. If you do this, your insurance company will divide the death benefit among them. You may assign different proportions of your life insurance benefits to each beneficiary.

If the beneficiary is revocable, you can change the beneficiary at any time without telling them.

If the beneficiary is irrevocable, you must have the irrevocable beneficiary’s written permission before making beneficiary changes.

If you live in Quebec and name your spouse as your beneficiary, the designation is automatically irrevocable. You must specifically make it revocable when you first designate your spouse in Quebec.

Naming a beneficiary who is under legal age

If the beneficiary you name is under the legal age when you die, you may want to set up a trust and designate a trustee or administrator. This person can hold the proceeds of the death benefit in trust on behalf of the minor.

If you don’t name a trustee or administrator, the death benefit, plus any interest it earns, will be held in trust by the province or territory. It will be paid out when your beneficiary reaches legal age. Consult with a lawyer or financial advisor for more details.

Naming your estate as the beneficiary

If you name your estate as the beneficiary. The estate will distribute the death benefits according to the terms of your will. The proceeds of the death benefit will become part of your estate and will be subject to estate taxes. If the death benefit is part of your estate, creditors may claim the death benefit to pay for your outstanding debts.

If you name your estate as your beneficiary:

• the death benefit will become part of your estate
• the death benefit will be distributed according to the terms of your will
• the money will be subject to taxes when your estate is settled

How to name a beneficiary

It’s important to name a beneficiary for each policy form when you purchase life insurance. If you don’t, your insurer will assume by default the beneficiary is your estate.

You may want to consider naming an alternate or contingent beneficiary. This is the person or persons who will receive the proceeds of the death benefit if your named beneficiary dies either before you or at the same time as you.

It’s a good idea to review your beneficiary designations from time to time and update them if necessary.