Credit card balance insurance: rights and responsibilities

From: Financial Consumer Agency of Canada

Credit card balance insurance is an optional service that may cover the payments, or part of the payments due on your credit card under specific conditions, such as if you become sick, disabled or die.

There are important exclusions on the coverage that credit card balance insurance provides.

Learn more about credit card balance insurance.

Federally regulated financial institutions offering credit card balance insurance must obtain your consent before charging you for this service. They must also provide you with the terms of the agreement, information about the cost of the service and how you may cancel the service. Financial institution staff must also be knowledgeable about the product.

You should review the credit card balance insurance terms and conditions, found in the certificate of insurance before signing up for the insurance.

Credit card balance insurance is usually provided by a third party such as an insurance company, not the financial institution that issues the credit card.

To learn more about your rights when signing up for an optional financial product or service such as credit card balance insurance, visit Negative option billing: rights and responsibilities.

Voluntary code of conduct: authorized insurance activities

In addition to the regulatory requirements, Canada's banks have agreed to abide by a voluntary code of conduct regarding authorized insurance activities. Each bank is responsible for ensuring that its representatives implement, understand and follow the code. Banks have made a commitment to provide clear, understandable disclosure in documents related to authorized insurance products, including credit card balance insurance.

The banks have agreed to provide each eligible customer who has been accepted for insurance coverage with disclosure documents that set out the following:

  • the fact that the product being applied for is an insurance product
  • the key terms and definitions related to the insurance
  • all of the customer fees and charges associated with the insurance product, and how they would be payable
  • the fact that insurance coverage from a specific company is optional, if a separate charge is levied for the coverage
  • the name of the primary insurance company underwriting the insurance product
  • how and when the customer would be notified of acceptance or rejection of the insurance coverage
  • when the insurance coverage would come into effect and when it would terminate
  • the duration of any “free look” period, during which all premiums charged would be refunded if the customer decides to cancel the insurance coverage
  • the customer’s responsibilities and the right to cancel the insurance coverage at any time
  • the terms and conditions that might limit or exclude coverage
  • the claims procedures
  • how to obtain additional information about the insurance coverage

What you s​hould do if you feel your rights are not being respected

If you feel that a federally regulated financial institution is not respecting your rights, contact the Financial Consumer Agency of Canada.

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