Loan insurance FAQ

1 - Eligibility and enrolment

1.1 Am I eligible for life insurance?

To be eligible, you must be a resident of Canada or the United States, you must be 18 to 64 years of age at the time of application, and be a borrower, co-borrower, guarantor, endorser or the spouse of one of these people.

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1.2 Am I eligible for disability insurance?

To be eligible, you must have enrolled in life insurance and, in the past four weeks, have completed at least 60 hours of remunerated work or, if you are self-employed, have earned at least $10,000 in gross income during your last fiscal year preceding the signature of this application.

Furthermore, if you are receiving income replacement payments or if you have stopped working or are unemployed, you are not eligible for disability insurance.

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1.3 Am I eligible for critical illness and accidental dismemberment insurance?

To be eligible, you must have enrolled in life insurance.

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1.4 What is the insured amount in the event of death?

In the event of death, the insurer will pay the death benefit to the Bank based on the following rules:

  • Mortgage loan, personal loan or personal loan with mortgage security: the insured loan balance calculated on the date of death, plus all accrued interest since the date of death.
  • All-In-One or line of credit (if death is accidental) or demand note: the insured balance outstanding calculated on the date of death, plus all accrued interest since the date of death.
  • All-In-One or line of credit (if death is not accidental): the lesser of the following amounts: 
    • The insured loan balance on the date of death; 
    • or o 110% of the average daily balance used over the past 12 months (or since the effective date of insurance if less than 12 months).
  • The maximum amount that can be insured is $500,000 for insurance on a mortgage loan, an All-In-One and a demand note. It is $1,000,000 for a personal loan and a personal line of credit.
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1.5 What is the insured amount in the event of disability?

The benefits are prorated for each day of disability that is not part of a complete period covered by a payment.

  • Mortgage loan or personal loan with mortgage security: the insured payment, up to a maximum of 24 months of consecutive insured payments for the same disability, without exceeding 48 months of insured payments for all the insureds for the term of the loan.
  • Personal loan: the insured payment, up to a maximum of 24 months of payments if the disability prevents you from carrying out your normal work duties or until the end of the loan term if the disability prevents you from carrying out any remunerated work.
  • All-In-One or line of credit (if disability is accidental): the lesser of the following amounts (up to a maximum of 24 months of consecutive insured payments for the same disability, without exceeding 48 months of insured payments for the term of the loan):
    • 2% of the loan balance; or
    • the insured amount chosen; or
    • the amount of the maximum benefit.
  • All-In-One or line of credit (if disability is not accidental): the lesser of the following amounts (up to a maximum of 24 months of consecutive insured payments for the same disability, without exceeding 48 months of insured payments for the term of the loan):
    • 2% of the loan balance; or
    • the insured amount chosen; or
    • 2% of 110% of the average daily balance used over the past 12 months (or since the effective date of the insurance if less than 12 months); or
    • the amount of the maximum benefit. 
  • The maximum insured amount is:
    • Mortgage loan and All-In-One: $2,000 per month
    • Personal loan: $2,500
    • Personal line of credit: $5,000
  • Demand note: coverage not available.
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1.6 What is the insured amount in the event of a critical illness diagnosis?

In the event of critical illness, the insurer will pay the critical illness benefit to the Bank based on the following rules:

  • Mortgage loan: the insured loan balance calculated on the date of diagnosis, plus all accrued interest.
  • All-In-One or line of credit : the lesser of the following amounts:
    • the insured loan balance on the date of diagnosis; or
    • 110% of the average daily balance used over the past 12 months (or since the effective date of the insurance if less than 12 months).
  • The maximum insured amount is:
    • Mortgage loan and All-In-One: $150,000
    • Personal line of credit: $1,000,000
  • Personal loan, personal loan with mortgage security or demand note: coverage not available.
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2 - Insurance contract

2.1 What is a waiting period?

A waiting period is a certain number of continuous days of disability following an insured event during which no benefits are payable.

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2.2 What is the pre-existing conditions clause?

If death, disability, critical illness or accidental dismemberment occurs within 12 months of the insurance taking effect and you were treated during the 12 months prior to the insurance taking effect for the same illness, symptom or injury that directly or indirectly resulted in the death, disability, critical illness or accidental dismemberment, then no benefits will be payable.

You are considered to have been treated if you consulted or received treatment from a physician or other health care professional, underwent tests, took medication or were hospitalized.

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2.3 If the claim for benefits is approved, is payment made by cheque or is it deposited in my bank account?

If your claim is approved, the payments will be applied directly to your loan. If you have already made the payment, then the amount will be deposited in the bank account from which your loan payments are debited.

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2.4 Do I have to continue making my payments while my file is being studied?

You must continue making payments while the insurer is evaluating your claim for benefits.

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3 - Risk assessment by the insurer

3.1 What is a medical requirement for an insurance application?

Before the insurer can adequately evaluate the state of your health, certain medical information is required. These medical requirements form the basis for evaluating the state of your health. The requirements vary depending on the age of the insured and the amount of coverage requested. With this information in hand, the analyst evaluates the risk of financial loss that the insurer incurs in insuring you.

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3.2 What are the risk factors the insurer evaluates?

The main factors analyzed by the insurer include:

  • height and weight
  • medical history
  • tobacco use
  • lifestyle

Other factors may also be evaluated as each file is processed individually.

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3.3 What are the steps in the analysis of my insurance application?

The analysis of your file can involve the following steps:

  • A representative from National Bank Insurance or one of its partner firms will contact you. After identifying himself, the representative will ask you questions in order to analyze your file. 
  • If necessary, a nurse will visit you at your convenience, either at home or at work, to carry out routine tests. This visit generally involves measuring your height and weight, taking your blood pressure and checking your pulse, but can also include taking blood samples and urine samples.
  • Depending on the insurer's selection criteria, more specific tests may be required, such as an electrocardiogram. If this is the case, you will have to go to the clinic specified by the representative when making the appointment.
  • In certain exceptional cases, a complete medical exam by a physician may be required.

Once the analysis is complete, the insurer will notify you, in writing, of its decision regarding your file.

 

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3.4 What is a consulting firm or a paramedical firm?

To properly carry out its medical analysis, the insurer has forged partnerships with a number of trustworthy consulting firms and paramedical firms that help the insurer gather information.

A paramedical firm is a company that provides medical-related services to assist insurance companies in evaluating the health of their clients.

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4 - Calculation of premiums

4.1 What are the criteria for calculating loan insurance?

Your premium is calculated based on the amount insured and your age. For a mortgage loan, the All-In-One and line of credit, your gender and tobacco use is also taken into account when calculating the premium.

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4.2 Is the premium fixed?

 Type of financing

 Premium

  • Mortgage loan
  • Personal loan
  • Personal loan with mortgage security

Stays the same for the duration of the loan if the conditions stay the same

  • All-In-One
  • Line of credit
  • Demand note

Adjusted on every anniversary date of the signature of the insurance proposal

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4.3 How can I find out the premium amount?

Use the following calculators to find out the insurance premium on your mortgage loan or personal loan:

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