Getting an insurance policy
Before getting insurance, take the time to determine the type and amount of insurance coverage you need. Consider reviewing your insurance needs on a regular basis as they may change over time.
Where to buy insurance
To buy insurance, you need to apply for it and meet certain conditions to be approved. Then the insurance company will issue your policy.
You can buy insurance from:
- a licensed insurance agent
- a registered insurance broker
- an insurance company
- a lender when you apply for a loan
Regardless of where you buy insurance, an insurance company will issue your policy.
You can buy insurance:
- over the phone
- in person
You may get a discount if you buy more than one type of insurance from the same company. For example, if you buy your home and car insurance together. You may also get a discount if you complete and submit your application online or have a good credit score.
Choosing an insurance company
Dealing with an insurance company with a federal, provincial, or territorial license will ensure you have:
- access to a complaint-handling process if you need to file a complaint
- protection in case your insurance company fails
Assuris protects life insurance benefits, up to a certain amount, in case a life insurance company fails.
The Property and Casualty Insurance Compensation Corporation (PACICC) protects home and car insurance benefits when an insurance company fails. This is also up to a certain amount.
Using an insurance agent or broker
An insurance agent is someone who represents an insurance company and sells its insurance products.
An insurance broker is a person or company who sells the products of several insurance companies. In some cases, a life insurance agent may also represent several insurance companies.
Dealing with a licensed agent or registered broker will help ensure they:
- are properly trained
- have the resources to provide you with the insurance services you may need
Agents and brokers must be licensed in the province or territory in which they do business. Confirm that they are before dealing with them.
Choosing an insurance agent or broker
Before choosing an insurance agent or broker, do your research.
Ask the agent or broker:
- to provide references from other clients
- about their training and qualifications
- if they passed the Life License Qualification Program (LLQP) if you're buying life insurance
- if they belong to a professional association, such as:
- the Financial Advisors Association of Canada
- the Insurance Brokers Association of Canada
- how long they’ve been in business
- what services they’ll provide after selling you the policy
Shopping around for insurance
Shop around, get quotes and compare policy details, such as coverage and cost. Some policies may be cheaper but may not offer the same level of service or coverage.
If you're a member of a union, association or club, many insurance companies offer special rates for group coverage. Coverage usually ends when you're no longer a member of the group or when you reach a certain age.
Before signing, read the policy carefully. Make sure you understand what your policy covers and doesn't cover.
Criteria insurance companies use to issue a policy
Depending on the type of insurance you're getting, insurance companies will decide if they’ll sell you a policy based on information such as:
- your age
- your sex
- your medical history in the case of life insurance or disability insurance
- your credit history
- any previous claims you've made
- the amount of coverage you're asking for
Insurance companies will consider the risk of insuring you. They’ll assess your eligibility for coverage before providing you with a policy. This is the underwriting process.
The underwriting process will determine:
- how much coverage the insurance company will provide
- which conditions are excluded, if any
- the premium you'll need to pay
As part of the application for life and health insurance, you need to prove that you're in good health. Insurance companies may require that you complete a medical questionnaire or exam before approving you for a policy. This is evidence of insurability.
No matter what type of insurance you're applying for, answer all questions on your application completely and honestly.
If you don't:
- the insurance company could cancel your policy or refuse any claim you make in the future
- you may not be able to get insurance from any company in the future
Maintaining your insurance coverage
Here are some tips to maintain your insurance coverage.
Pay your premiums on time
If you don't make your insurance payments, also called premiums, on time your insurance company may cancel your policy. Your coverage will stop and you'll no longer be protected.
If your insurance company cancels your policy, you may:
- find it difficult to get coverage in the future
- have to pay higher premiums
Notify your insurance company of any changes in your situation
Tell your insurance company as soon as possible about any changes that may affect its ability to cover you.
For example, your car insurance company will need to know if you’ve committed traffic violations. They’ll also need to know if another driver uses your car.
Your life insurance company will need to know about any medical situation or illness.
Some changes may save you money. If you’re teleworking or you retire, your premiums may go down because you’re no longer driving to work.
Renew your policy on time
Make sure to renew your policy on time to maintain your coverage. Your insurance policy will list the exact procedure you need to follow to renew it.
You may also want to consider shopping around for another insurance provider. Shopping around will help you get the best value for the coverage you need.
If your insurance company ends your coverage
Your insurance company may not renew your policy. For example, because of your claims history or non-payment of premiums.
If your insurance company tells you that they won't renew your policy, ask them to explain their decision. Ask for the explanation in writing. If you're not satisfied with the response, you can file a complaint.
Cancelling your insurance
You may have to pay a penalty if you cancel your policy before its expiry date.
To cancel your policy:
- Check your policy for the specific steps you need to follow
- Contact your insurance company
- Ask your insurance company to confirm in writing that they cancelled your policy
Free look period
You have the right to cancel your life insurance policy within a set period, usually 10 days. You’ll get a refund on the premiums you paid. This is your rescission right. This free look or grace period allows you to review the policy to make sure it meets your needs.
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