If you travel frequently, shop often, or want access to exclusive insurance and lounge privileges, these cards can provide real value. The other consideration is the welcome bonus. If it’s a generous offer, it can usually be worth two to three annual fees, so it’s a good way to test out the card. 

However, for those who don’t travel much or mostly spend on everyday purchases, the premium perks might not be worth the cost.

With many Canadian credit cards offering travel rewards, lifestyle credits, and luxury experiences, it can be tempting to upgrade. However, getting the most out of a premium card depends on your personal spending habits and needs. 

Understanding Premium Credit Cards in Canada

Premium credit cards in Canada stand out due to their robust rewards programs, elevated perks, and significant travel and insurance benefits. These cards also tend to have higher annual fees and stricter eligibility requirements than basic cards, making their value dependent on your personal spending and lifestyle.

Key Features and Benefits

Premium credit cards offer a variety of perks for frequent travellers, high spenders, and those who value convenience and security. Common advantages include access to airport lounges, comprehensive travel insurance, and priority boarding.

Additionally, depending on the card, you may receive extra perks such as hotel benefits, retail credits, exclusive dining experiences and concierge services. At face value, many people may not find the perks offered to be worth the annual fee, but to others, having a premium credit card is a status symbol.

Annual Fees and Costs

Premium credit cards in Canada typically have annual fees of $399 or more. Higher fees often indicate better rewards, travel credits, and insurance, but it’s crucial to calculate whether you’ll make enough use of these perks to justify the expense.

It’s worth mentioning that no premium credit cards in Canada offer no foreign transaction fees. 

Whenever considering a premium credit card, always weigh the costs against the benefits you’re getting.

Eligibility Criteria

To qualify for a premium credit card in Canada, you generally need a good to excellent credit score – typically 700 or higher. Most issuers also require a minimum personal income, which can range from $60,000 to $120,000 per year, or household income thresholds for shared cards. That said, American Express does not have a formal income requirement, so it is possible to get the Amex Platinum Card with a lower income.

Comparing Value: Premium vs. Standard Credit Cards

Premium and standard credit cards vary in the rewards, travel perks, and additional features they include. Costs like annual fees often differ, and the benefits may only be valuable if they align with your spending habits and lifestyle.

Earning and Redeeming Rewards

Premium credit cards typically offer higher standard reward rates. For instance, you might earn 1.25 points per dollar on most purchases. However, some basic cards, like the American Express Cobalt Card, provide higher earning rates on eating out and drinks, at 5 times the points. If you spend heavily in certain categories, a premium card can give you more value. Otherwise, basic cards might be more practical if your spending is more varied or if you prefer simple cash back.

Travel Perks and Insurance Coverage

Premium cards may offer extensive travel perks, including airport lounge access, travel insurance, priority boarding, and annual travel credits. These benefits can be valued at several hundred dollars per year, especially if you travel a few times annually.

While standard travel credit cards may offer some benefits, they’re usually not as generous as premium cards.

If you travel frequently or require strong insurance protection, premium cards can make a noticeable difference. For occasional travellers, these perks may not justify the higher annual fee.

The Best Premium Credit Cards in Canada

Premium credit cards in Canada cater to high spenders and frequent travellers with a suite of exclusive rewards and benefits. Each card on this list charges a substantial annual fee, but offers significant value with travel perks, insurance coverage, and points-earning potential.

American Express Platinum Card

The American Express Platinum Card is recognized for its broad range of travel benefits, including unlimited access to airport lounges worldwide through the Global Lounge Collection. You also receive an annual $200 travel credit, a yearly $200 dining credit and comprehensive travel insurance.

The earning rate is 2 points per $1 spent on dining and travel, and 1 point on all other purchases. The card also unlocks hotel privileges, including status upgrades with Marriott Bonvoy and Hilton Honors.

A key consideration is the annual fee of $799. While the annual credits offset this fee by $400, you’re still paying a net yearly fee of $399. You need to decide if the benefits you’re getting are worth more than the fee.

TD Aeroplan Visa Infinite Privilege Card

The TD Aeroplan Visa Infinite Privilege Card is tailored for Air Canada and Aeroplan fans. You enjoy priority check-in, priority boarding, free checked bags, and Maple Leaf Lounge access.

The card earns you 2 Aeroplan points per $1 spent on eligible Air Canada purchases, 1.5 points on gas, groceries, and travel, and 1.25 points on everything else. These points can be redeemed for flights and other rewards within the Aeroplan program. Considering one Aeroplan point is worth 1.5 to 2 cents, there can be incredible value here.

You also get extensive travel insurance, including trip cancellation and rental car collision coverage. The annual fee is $599, which makes sense if you regularly fly Air Canada and want to maximize your Aeroplan points and travel benefits.

RBC Avion Visa Infinite Privilege Card

The RBC Avion Visa Infinite Privilege Card earns you Avion Rewards. You get 2 points per $1 spent on travel, 1.25 points per $1 on all other purchases. Your points can be redeemed for any type of travel available on the RBC travel portal, or you can transfer your points to airline partners such as WestJet and British Airways.

Some of the benefits included with the card are six airport lounge passes, premium travel insurance, and exclusive hotel upgrades. A $399 annual fee is charged, which is lower than other premium options while still providing considerable benefits.

This card is ideal if you want flexibility in redeeming rewards, particularly for travel outside fixed airline partners. 

Who Should Consider a Premium Credit Card?

Premium credit cards are not the right fit for everyone, but certain groups can make excellent use of their benefits. Key factors include your spending patterns, travel habits, and professional needs.

Assessing Spending Habits

If you consistently spend over $2,000 each month on your credit card, the higher earn rates on premium cards can provide substantial rewards. These cards usually offer better returns on groceries, dining, gas, and travel, often between 2% and 5% in rewards per dollar.

Large monthly expenses like family groceries or recurring household bills can help maximize reward potential. For those who rarely carry a balance, the extra perks often outweigh the annual fee, as long as you pay the card in full to avoid interest charges.

Some premium cards also include annual credits or perks – such as travel credits, streaming service rebates, or lounge passes – that can directly reduce the yearly fee. If you regularly make use of these benefits, the value you get can easily surpass what you pay.

Frequent Travellers

Frequent flyers or those travelling multiple times a year benefit the most from premium cards. Features like airport lounge access, travel insurance, and priority boarding can provide added convenience and savings.

For those redeeming points for flights or hotels, higher earning rates and flexible redemption options make it easier to get the most value. This is especially true for cards linked to major airline or hotel loyalty programs, which offer exclusive access and discounts.

Business and Professional Users

Self-employed individuals, small business owners, and professionals who frequently entertain clients or travel for work can benefit substantially from premium cards. Many cards offer higher credit limits and better welcome bonuses, supporting large purchases.

Final Thoughts

When choosing a premium credit card in Canada, compare the annual fee to the value you expect from its benefits. These fees can be $399 or higher.

Consider your spending habits. If you travel frequently or spend extensively in specific categories, rewards and benefits like airport lounge access, insurance, and higher earn rates might justify the expense.

Frequently Asked Questions

What benefits justify the high annual fee of premium credit cards in Canada?

Look for airport lounge access, priority airline services, comprehensive travel insurance, exclusive event access, and retail credits.

Which premium credit card offers the best benefits in Canada?

The best card depends on your lifestyle and preferences. Some cards excel in travel rewards while others focus on flexible points or luxury benefits. Major options from banks like American Express, TD, or RBC stand out for features such as airport lounge access and premium insurance coverage.

What are the typical qualification requirements for a premium credit card?

Most issuers require a credit score of at least 725, with some cards needing an “excellent” rating above 759. You may also need to meet minimum income thresholds, typically around $60,000 per year individually or $120,000 per household. Banks may also look for a solid payment history and existing credit limits.

Can you get a premium credit card for free?

Premium credit cards in Canada usually charge an annual fee starting at $399. The fee is never waived, but some banks will offer a discount if you hold a qualifying bank account. You should weigh the potential rewards against these fees to assess overall value.

Life insurance is designed to protect your family if you die and your income disappears. Obviously, you don’t want them to struggle financially if the unthinkable were to happen which is why life insurance is the perfect solution.

There’s just one problem, you’re likely paying more bills than you ever have in your life at this time, so the thought of adding yet another monthly expense to your budget can give you a serious headache.

Well, the good news is that there’s a type of coverage that gives your family the financial protection they need without breaking the bank: term life insurance.

In this article, I’m going explain what term life insurance is, who should buy it, how much it costs, and how to get coverage.

What is term life insurance?

So, what is term life insurance? A term life insurance policy protects your family financially for a set period of time. 10, 20, and 30 years are the most common term lengths. You select the amount you want to be covered for and the number of years you want it to last for when you buy the policy.

If you die while your policy is active, your beneficiary will get a tax-free death benefit that’s equal to your policy coverage amount. So if your coverage amount is $500,000 and you die while holding your policy, your beneficiary will get a tax-free lump sum payment of $500,000. If you die after your policy expires, your insurer won’t pay anything which is why you want to make sure you have the right coverage.

Once you buy a term insurance, your premiums payments and coverage amount will be locked in for your entire policy term. This means that even if you develop a serious health condition or become an avid scuba diver during your policy term, you won’t have to pay more in premiums.

What’s the difference between term and whole life insurance?

You now know what term life insurance is, but what about whole life insurance? Whole life insurance is a type of permanent life insurance. This means that the permanent policy lasts for the rest of your life. And your insurer will have to cough up money to pay your death benefit when you die (no matter when this ends up happening).

Whole life insurance may seem tempting because it protects your family for the rest of your life and includes a cash value. But because your insurer will definitely have to pay your death benefit at some point, whole life insurance policies tend to be much more expensive than term life insurance policies. If you don’t actually need coverage for the rest of your life, which many people don’t, you’ll spend years padding your insurer’s pockets for no reason.

Instead of getting a permanent life policy, most people go with term life insurance and invest the difference. Here’s a detailed breakdown of the two.

Term life insurance vs universal life 

Universal life insurance is another type of permanent life insurance policy. Similar to whole life insurance, you can borrow against the cash value of your policy. The biggest difference is that universal life insurance policies are more flexible when it comes to premiums and death benefits.

When you compare term life insurance with universal life insurance, they’re basically two different products. Term life insurance covers you for a specific period of time, whereas universal life policies are a permanent insurance policy. Your life insurance rates will most likely be more with universal life, as opposed to term life.

What happens when term life insurance expires?

We mentioned that term life insurance lasts for the length of time you select when you buy your policy. So at some point, it’ll expire like the milk sitting in your fridge (just not that quickly). But what exactly happens when you policy term ends?

When your term life insurance policy is close to expiry, you’ll have two options: you can let it expire or you can renew it. You might let your policy expire if you don’t need coverage anymore or if it makes more sense to continue getting coverage by applying for a new policy altogether. In comparison, you might decide to renew your policy if your family still needs financial protection and sticking with the same policy seems like the best bet.

Keep in mind that if you renew your policy, you’ll probably end up paying a higher rate for it. After all, when you renew your policy, you’ll be older than you were when you first bought it. Because being older makes you riskier to insure, your insurance company will compensate for this higher risk by charging you more for coverage. Unfortunately, there’s no senior’s discount on life insurance!

Who should get term life insurance?

Term life insurance might be right for you if you need coverage for a certain number of years only, such as when you have financially dependent kids or a mortgage. Because you get to choose your policy term when you buy term life insurance, you can pay for coverage only during the years when your family would be in a bind if you died.

With term life insurance, there’s only a chance that you’ll die while holding your policy and your insurer will have to pay up. As a result, term life insurance is appealing to people who are looking for “cheap” coverage.

Even if you know that whole life insurance is the right choice for you, getting term life insurance now might be a good temporary solution. Most term life policies can be converted to a whole life policy down the road. So you can always start with term life insurance now and convert it to whole life insurance when your wallet isn’t still bleeding from the down payment you just put on a home.

What coverage amount and policy term should you choose?

The coverage amount and policy length that’s right for your particular family depends on your needs and financial obligations. In general, most people buy a policy that covers the expenses they’d pay to support their family until their mortgage is paid off and their kids are out of the home. For example, my wife and I got $500,00 in coverage with a term of 20 years.

However, if you have a child with special needs or want to help support an aging parent with long-term care, you might need a policy with a higher payout and longer term length

How much does term life insurance cost?

The amount you can expect to pay for term life insurance depends on a few key factors. These factors determine how much your insurer would have to pay if you died or how likely it actually is that you would die while holding your policy. In other words, they tell your insurer how risky you are to them and how likely it is that they’d have to pay up on your policy.

These are the key factors that determine how much your monthly premiums would cost:

• Coverage amount: The more you want to be covered for, the higher your premiums will be.
• Policy length: The longer you want coverage for, the higher your premiums will be.
• Age: You’ll pay higher premiums if you apply for a policy when you’re older vs. younger.
• Gender: If you’re a male, you’ll likely die earlier compared to a female. As a result, males will pay higher premium payments.
• Health: You’ll pay higher premiums if you have a health condition that raises your risk of dying early.
• Smoking status: Smokers pay higher premiums than non-smokers do.

For example, if you’re a healthy non-smoker, a $250,000 20-year policy might cost you $24.77/month if you’re 35 years old when you buy the policy. However, the same policy might cost you $55.20/month if you’re 45 years old when you buy it. That’s more than double the price!

What’s the best life insurance company?

It’s not fair to say that one life insurance company is better than the other as there are many insurers in Canada that offer excellent term life insurance policies. That said, there are a few things you should focus on when you’re considering a term life insurance policy from a specific company.

Financial health

You want to know that if you die at any point during your policy, your insurer will still be around to pay your death benefit. Fortunately, in Canada, the insurance industry is tightly regulated. As a result, most insurance companies are very stable financially, so you don’t need to worry too much about choosing an insurer that’s secretly about to go under.

E-applications

Submitting a paper life insurance application can increase your application’s processing time by a mind-boggling 6–8 weeks. That’s why choosing an insurer that accepts e-applications may be a good idea

Price

It’s natural to think that if one insurer offers a lower rate for a policy than everyone else, they must have something sketchy going on. The reality is that a lower price usually just means that the company is pricing the policy more competitively to win you over as a customer. There’s nothing wrong with going with an insurance provider with the lowest rates.

In case you want to learn more about the top Canadian life insurance companies, PolicyMe has reviews so you can get more information.

How to buy term life insurance?

If you’re already stretched thin these days, you might worry that buying life insurance will be a complicated process that you don’t have time for. But in reality, getting coverage is usually easier than you think.

Here’s how the process works:

1. You get quotes for a policy from an insurer or independent broker
2. You choose a quote and fill out an application
3. Your insurer collects information about your health and lifestyle (medical exams may be required)
4. You get approved for the policy

But, although you probably know you need life insurance, you may be struggling to figure out what kind of life insurance to get and how much you need.

How much life insurance do I need?

How much life insurance you need depends on various factors. How much you need will likely differ from others. If you’re trying to figure out an exact number, consider the following:

Start with your net income

Take your annual net income (or after-tax income) and multiply it by the number of years you’d like to be able to replace that income if anything should happen to you. As a rule of thumb, you should probably be able to provide a minimum of five to seven years of annual income to your beneficiaries.

Ask yourself who relies on you?

Ask yourself the following questions: Do you have a partner or spouse? Children? If so, how old are they and how many do you have? What are your dreams for their future? For example, do you want them to have the opportunity to attend university or college? Do you want them to remain in the same home? Is it important to you that your family continues to enjoy life’s little pleasures, such as yearly family vacations? The more people who depend on you, the more coverage you need.

Don’t discount non-monetary contributions

If you are not the main breadwinner in the family, you may believe only your spouse needs to have life insurance. But, consider this: if you are the primary caregiver for your children or other dependents, your labour would have to be replaced if you died. Ask yourself how much it would cost your spouse in childcare, housekeeping services and meal prep if you weren’t around. Then insure accordingly.

Tally your debts

Do you have a hefty mortgage, a lingering student loan, car loans or credit card bills? If so, tally them up. You will want to ensure your spouse or partner can pay off those debts if you die. Having cash to pay off the mortgage could ensure your spouse can keep your children in their home rather than selling it.

Subtract any life insurance you already have

Many people have mortgage life insurance or get some group insurance coverage through work (often worth one to three times their annual salary). If you’re not sure whether or how much life insurance you have through work, talk to your HR department. Then subtract that sum from the total amount of life insurance you need.  

Subtract your savings and investments

If you have sizeable savings and investments, you may need less insurance. For example, let’s say you have $200,000 in a high-interest savings account. Since that amount is liquid, your loved ones will already have funds to draw upon if you were to suddenly pass.

Life insurance example

If you’re still feeling baffled, take the following example as your model and do your own calculation. Let’s say you are a couple aged 35 and 36. You both work, and you have two children. Your four main life insurance goals include the following:

• Goal #1: You want to have $10,000 set aside for a funeral in the event one partner should die.
• Goal #2: You want to be able to pay off your $400,000 mortgage.
• Goal #3:  You want to be able to cover post-secondary education for your two children when the time comes.
• Goal #4: You want to be able to replace $70,000 in annual after-tax income for seven years.

What assets do you already have? In this case, we will assume that you have:

• $100,000 in life insurance through your workplace
• $30,000 in shared RRSP savings

What is the coverage shortfall? Your total life insurance needs would be approximately $973,000. If you subtract the $130,000 in assets you already have, you’re left with a coverage shortfall of about $843,000. At the bare minimum, you’ll want to get coverage for that amount, but some people may want more.

What is life insurance?

Think of life insurance as a way to protect your family’s financial security. You pay a monthly premium, with the guarantee that, if you die, your family will receive a one-time cash payment to help them with the cost of living and raising a family.

When you take out a policy, you and your insurer agree on the amount of the premiums owing (your monthly payments), the time frame of the agreement (how long you will be covered), and the amount of pay-out in the event of your death.

You can get optional riders that adjust coverage to fit your needs. For example, you might choose a rider that lets you defer paying premiums if you become disabled, or that gives you more coverage later in life without a medical exam.

Term life insurance

Term life insurance is the simplest form of life insurance and often the most cost-effective for young families. Basically, you agree to pay premiums for a specific term (usually 10, 15 or 20 years). The insurer agrees to pay out a lump sum if you die before the term is up.

Term life premiums are based on three things: your age, health, and life expectancy. In some cases, you may have to undergo a medical exam. Term policies are usually the cheapest way to get a lot of life insurance coverage, but they tend to go up in cost as you age.

Whole life insurance

Whole life (or universal insurance) combines insurance coverage with a savings vehicle. The monthly premiums are higher, but the policy is meant to be renewed for as long as you live, and it grows in value as time goes on. As a policyholder, you can make withdrawals from the policy for any purpose.

On the plus side, over time, the cash value growth in your policy may be enough to cover your premiums. There are also several tax benefits to whole life policies, such as tax-deferred cash value growth and tax-free access to the cash portion.

On the minus side, whole life carries higher monthly premiums and the growth rate of the policy’s cash value generally doesn’t compare well to investments such as mutual funds and exchange-traded funds (ETFs). Administrative fees can also cut into the rate of return. As a rule of thumb, most advisors suggest buying term insurance and investing the difference.

When should I get life insurance?

There’s no hard and fast rule, but most people begin to think about getting life insurance when their lives change and they realize others are counting on them financially. The most common include:

• When you’ve just tied the knot – You owe it to your spouse to think about what would happen if one of you should die. If you own nothing and have no children, this is probably less crucial, but if you are the sole breadwinner or have taken on debts and other financial burdens, you need to think about what would happen if you were gone.
• When you’ve just become a parent – For many people, the helpless heft of a newborn in their arms becomes the impetus for taking out a life insurance policy. Life insurance helps provide for your children in case something happens to you.
• When you’ve just become a home-owner – For many Canadians, a home is the biggest and most expensive asset they will ever own. Life insurance can help your family pay off the mortgage if you die.
• You’ve just started a business – If you’ve started a business with one or more partners, life insurance is a must. It can allow the surviving partner to help pay off debt, carry overhead expenses and pay for your replacement. 

How much does life insurance cost?

The short answer: life insurance doesn’t have to cost the earth. The average cost of life insurance per month in Canada ranges from $15 to $100, according to PolicyMe, an online vendor of life insurance. The cost varies according to your age, gender, health and the type of policy you have. Here are a few examples of the cost of term life insurance:

• For ages 40 and under – The average monthly cost of term life insurance in Canada for those aged 40 and under was $26.55 for $500,000 coverage and a 10-year term.
• For all ages – The average cost of term life insurance in Canada was around $34 a month or $380 per year in 2023, according to industry-wide data.
• For smokers – Life insurance for smokers costs more, at $79.91 per month for a male and $57.72 for a female.

The cost of whole life insurance is more expensive. On average, whole life insurance costs $291.05 monthly for males and $337 for females.

Any person with dependents should strive to protect their family. That’s why talking about life insurance and getting it is so important. Here’s what you need to know to get started with life insurance. 

What is life insurance?

In simple terms, life insurance is an agreement between an individual and an insurance agency in which the individual will pay monthly or annual payments to the insurance provider, who, upon the death of the individual, will pay a lump sum to the beneficiaries of the individual.  

Types of life insurance

Life insurance isn’t a one-type-fits-all kind of product. There are a few different categories depending on your lifestyle and circumstances. Here is a look at three of the most popular life insurance options for Canadians.

Term life insurance 

Term life insurance is purchased for a term or a specified period of time, usually 10 or 20 years. During this time, you will pay the premiums, and should you die within the period of this term, your insurance provider will pay out a death benefit to your beneficiaries.  

Term life insurance policies are quite popular because of their affordability. There are no hidden fees or restrictions, and it can be cancelled before expiry without penalty. However, some term policies need to be renewed once the term is over, and at this point, costs will increase due to age (life expectancy), health, and overall life circumstances. To get around this, you could get a renewable policy.

Whole life insurance

Whole life insurance, on the other hand, is a type of permanent insurance that provides coverage for the entirety of your life. Like with term life insurance, whole life policies include a death benefit, but additionally, it also has a cash surrender value should you need to cancel the policy early. Obviously, this is not an ideal situation, however, sometimes life circumstances come up where you need the money, and with a whole life insurance policy, some of that money can be made available through the cash value.  

Whole life insurance can offer this cash surrender value because in the early years, when you are (assumedly) young and at your healthiest, you will actually overpay. This overpayment is what forms the cash surrender value should you decide to claim it. Then, as you age, your premium payments actually end up being less than your insurance, so you underpay rather than overpay, and the insurance company takes the money from the cash surrender to make up the difference. This structure means your premiums stay the same every year. 

Note that whole life insurance is often referred to as a universal life insurance policy.

No medical life insurance

When it comes to getting life insurance, you will need to get a medical exam. Your age, health, and medical history all play a large role in the premiums you pay for health insurance, and if your health is in poor standing, you may not qualify with some life insurance providers.

In this case, you will want to look to no medical life insurance (also called guaranteed life insurance). This type of life insurance does not require any medical details, checks, questionnaires, or exams. It is worth noting that typically, no medical life insurance has higher premiums and lower coverage, so make sure to do your research before choosing this route. 

What is the best type of insurance?

The best type of insurance to get depends on your personal circumstances. Most life insurance purchasers stick with term insurance. It’s the more affordable option and can be tailored as your needs change with each new term. 

Typically, whole life insurance is only recommended to individuals with very high incomes to better take advantage of tax-deferred benefits. Generally speaking, the premiums are too high for the average Canadian to be worth it.

That said, every individual has their own circumstances, so take the time to learn more, do the research, and have discussions before you decide on the best type of life insurance for you.

When should you get life insurance?

Not everyone needs life insurance. If you are single and don’t have anyone relying on you and your income, then chances are you really don’t need it. However, if you have a young family or any parents or siblings that you take care of or help out financially, then life insurance might be a good idea.

That being said, even if you have dependents, there are still a few things to consider. These include:

• Debt vs assets – Do you have a lot of debt that would then be a burden to your family should you pass away? Or are you in a strong financial standing that they will be able to get by fine with the assets you have in place?
• The age of your children – Life insurance makes sense when you have little ones to care for but if your children are grown and have jobs of their own, then they likely don’t depend on you financially anymore. 
• Your partner’s circumstances – Will your partner be able to support themselves alone in retirement? If not, life insurance can help build their post-retirement savings.
• Do you care for anyone who needs lifelong assistance – If yes, then life insurance can act as a security blanket to continue to support them. 

How much life insurance do I need?

If you choose to go ahead and get life insurance you will need to figure out how much you need. There is no perfect number, it will depend on individual circumstances and can also fluctuate depending on where you are in your life. 

A general rule of thumb is 5-7 times your annual salary is a good start, but there are several factors to consider:

• The remaining balance owed on your mortgage
• Any personal debts or loans
• Expenses (burial costs and  funeral expenses or even the potential of long-term care)
• How much of your income do your beneficiaries rely on?
• How many years your beneficiaries will need financial support for
• Any other assets or funds you have in place that your beneficiaries will benefit from

How much does life insurance cost?

The cost of life insurance is personalized, and age plays a large role. That said, according to PolicyMe, the average cost of life insurance in 2022 for a healthy 30-year-old looking at a 10-year term is $13 per month for $100,000 in coverage. That same coverage would cost over $100 per month if you were a 60-year-old smoker. 

What affects life insurance premiums

Life insurance premiums are determined on a per-person basis. As mentioned above, most life insurance policies require a medical exam and/or questionnaire ahead of time to help determine these rates. Some of the things that will play a role in determining your life insurance premiums include:

• Age
• Gender
• Health condition
• Lifestyle and hobbies
• Occupation 
• The coverage amount 

How to get life insurance

There are a number of life insurance providers out there, which means that there are many options. You will want to shop around for life insurance quotes to determine the best rates and life insurance products that best align with what you want and what you can afford. You can go to a life insurance company directly for a quote or use a broker who will get quotes for you. Online brokers are especially easy to use, as you can get quotes within seconds. 

When you have determined which provider you would like to go with and are ready to apply, make sure you have the following on hand:

• Some form of identification (SIN, driver’s licence, passport, etc)
• Proof of income (paystub or a letter of employment
• Proof of address (from a bill or letter from your landlord)

What is universal life insurance?

Universal is a type of permanent life insurance, which means that it follows you throughout the entirety of your life rather than a set number of years, like term insurance. That is, as long as you continue to keep paying the minimum premium. 

Where a UL policy differs from other types of permanent life insurance is that a portion of your premium payments go towards the actual life insurance, while another portion is divided into both a savings account and investments. Any savings/investments are tax-differed, and you can borrow against or withdraw from the policy (assuming you meet the minimum cash value requirement), which can be very handy in case of an emergency. Plus, you still have the death benefit for your beneficiaries. 

What’s the cash value of universal life insurance?

While the idea of investing and saving part of your premiums does seem attractive, as said above, one of the biggest concerns with universal life insurance is that the payments will actually cost more than the cash value. Since a portion of your payments goes towards investments, the cash value of universal life insurance will fluctuate over time depending on the interest rates. In an ideal world, it would increase. However, since it is an investment, it can just as easily decrease.

Don’t get caught up too much in building cash value with universal life insurance. The point of life insurance is to protect your dependents if you were to suddenly pass. Making sure they have enough to live without your income is more important than any investments that you can build with your policy.

Universal life vs whole life insurance

Now that you know what is universal life insurance, you’ll want to understand how it compares to other life insurance products.

Both universal life and whole life insurance are types of permanent life insurance, so as long as you pay your premiums, you will have lifetime coverage. Both types of life insurance allow you to borrow against or withdraw the cash value from the policy. 

However, a whole life policy is consistent. You will pay the same amount in premiums and have a guaranteed cash value accumulation. Universal life insurance, on the other hand, is more flexible when it comes to premiums and death benefits which also means that it can have less expensive premiums. However, that flexibility comes at a price, and universal life insurance doesn’t have as many guarantees. One of the biggest risks with universal life insurance is that your account may become underfunded and lapse. 

Universal life vs term life insurance

Universal and term life insurance are even more different. Term life insurance, as the name indicates, is only valid for a term or a set amount of time (ie: 10 years), whereas universal life insurance is permanent life insurance coverage and is designed to last the span of your lifetime.

Term life insurance only offers a death benefit, whereas universal life insurance offers a death benefit plus a savings component that policyholders can borrow against or withdraw from the cash value, which a permanent life insurance like universal life insurance does.  That said, term life insurance typically offers much larger death benefit options than universal life insurance.

Most experts recommend getting term life insurance and investing the difference compared to a universal life insurance policy into a stock market index such as the S&P 500 or Nasdaq. By doing this, you’d be creating your own cash value account.

Who is universal life insurance good for?

Universal life insurance isn’t for everyone. It is more complicated than other life insurance options and requires management by someone, such as a financial advisor, who really knows what they are doing. So if you want something simple and affordable, it’s not the best choice. That said, universal life insurance may be the right choice for you if you are someone who wants permanent coverage and:

• Wants access to cash that can be either borrowed or withdrawn throughout the duration of the policy
• Wants flexibility to adjust premiums and/or death benefits over the years
• Wants to have control over the investment portion

Typically speaking, this form of permanent life insurance is most commonly chosen by young Canadians who earn a high income and can afford to take on more risk since it’s a long-term investment and they don’t expect to need the money for many years to come or, individuals in a high-income bracket who have maxed out both their Registered Retirement Savings Plan and Tax-Free Savings Account.

How much does universal life insurance cost?

Universal life insurance premiums will vary depending on several variables and circumstances. That said, generally speaking, the cost of insurance will run you the following every month. 

• Under $100,000 coverage – $40/month
• $250,000 – $500,000 coverage – $81/month
• $1,000,000 – $2,000,000 – $93/month

Keep in mind that these are just averages. Factors such as gender, age, health, profession, lifestyle etc., will all play a role in determining your premiums.

How to access money from cash-value life insurance

One of the draws of universal life insurance is being able to access the policy’s cash value. However, in order to be able to do that, you need to be aware of the requirements and possible repercussions.

• It takes the cash value a while to build, and a minimum amount is required before you can borrow or withdraw.
• Cash withdrawals will likely impact the death benefit on your policy.
• There may be tax implications for withdrawing.

Pros and cons of universal life insurance

There are a lot of opinions on universal life insurance. Some people love the option and consider it to be a terrible product for the general public. So, before you decide, here are some main advantages and disadvantages of universal life insurance.

Universal life insurance pros

• Permanent lifetime coverage
• Potential of cash value growth over time thanks to investment strategies
• Flexible premium payments 
• Flexible death benefit amounts
• Tax deferral strategies 

Universal life insurance cons

• More expensive than term life insurance
• Possible limitations on cash value (make sure you understand the fine print)
• Hands-on and needs to be monitored
• Building the cash value takes time
• The investment portion can lose value as easily as it can gain value
• Flexibility options likely will require a health exam which may increase the price of your premiums

Is universal life insurance a good investment?

So, is universal life insurance a good investment? Well, maybe if you have specific life circumstances, but overall, for the average Canadian, probably not. There are a lot of risks, it requires a lot of attention, and while the savings and investment portion are intriguing, chances are you can earn more just by investing that money into your TFSA or RRSP. 

Since your universal life insurance policy is only valid so long as your cash value is above zero, you are taking on a lot of risk. According to a study by PolicyMe, 88% of universal life policies never pay out because the policyholders are unable to afford the premiums. 

How to get universal life insurance

Now that you know what is universal life insurance, and life insurance in general, you might be thinking it’s time to get a policy.

Whether you’re looking for universal or term life insurance products, you’ll want to shop around for quotes to ensure you get the best policy for your personal circumstances. You can do this yourself by checking in with individual life insurance companies, or you can work with an insurance broker or advisor who will get quotes for you. This can be done in person or online.

Once you are ready to apply, make sure you have the following on hand:

• Some form of identification (SIN, driver’s licence, passport, etc.)
• Proof of income (paystub or a letter of employment)
• Proof of address (from a bill or letter from your landlord)

To help you in this situation, there’s critical life insurance. This type of insurance differs from life insurance since you get paid while you’re still alive. The real question is, is critical illness coverage worth it?

What is critical illness insurance?

Critical illness insurance is a type of insurance policy that provides a lump sum benefit if you’re ever diagnosed with a serious illness. Some conditions that would be covered under your critical illness plan include heart attacks, stroke, cancer diagnosis, Parkinson’s disease and even organ transplants.

It’s important to note that while some employees may have critical illness insurance from their employers, it may only cover certain conditions, and the lump-sum cash benefit may not be very much.

Unlike life insurance policies, where your beneficiaries get the funds, critical illness insurance pays you. What you do with the benefit amount is entirely up to you. Most people will use the funds to cover any out-of-pocket costs, such as medical bills, medical equipment, and even retrofitting their homes to deal with the fallout of their health diagnosis. You could even use the funds for your mortgage payments or to purchase supplemental insurance.

How does critical illness insurance work?

Critical illness insurance is pretty straightforward. First, you choose the coverage options, the amount you want, and the term. You then pay monthly premiums for a critical illness insurance policy. 

If you’re ever diagnosed with a critical condition, your insurance company will pay you a lump sum. Generally speaking, your insurance provider will contact your healthcare provider for the details to verify your claim.

Once your claim has been verified, your insurance provider will send you a direct deposit or cheque for the funds you’re entitled to. 

Note that critical illness benefits only apply to what’s outlined in your policy details or benefits package. Trips to the hospital for medical emergencies or regular visits to the doctor would fall under your provincial health insurance plan. 

Unlike some regular health insurance products, there’s no high deductible with critical illness insurance. Any payments you receive are completely tax-free.

Some policies will allow you to reclaim part or all of your premiums if you never make a claim. If you opt in, your policy will usually end at that time. If you were to pass away before making a claim, some policies will provide your beneficiary with a death benefit.

What does critical illness insurance cover?

The conditions covered under a critical illness insurance policy will differ depending on your policy and insurance provider. Generally speaking, you’ll be fully covered for the following:

• Cancer
• Heart attack
• Aortic surgery
• Heart valve replacement or repair
• Stroke
• Coma
• Dementia
• Alzheimer’s Disease
• Amyotrophic lateral sclerosis (ALS)
• Parkinson’s Disease
• Paralysis
• Multiple sclerosis
• Occupational HIV infection
• Blindness
• Deafness
• Loss of limbs
• Kidney failure
• Major organ transplant

In addition, many conditions are partially covered, so you’ll still get some payment. Is it also worth noting that each individual critical illness pays a separate amount. For example, if you suffer a heart attack and are diagnosed with cancer later, you’d get paid twice.

How much does critical illness insurance cost?

The cost of critical illness insurance will differ depending on various factors such as your age, health, the amount of coverage you want and the insurance provider. The number of illnesses covered in your plan could also affect your monthly costs.

Generally, younger and healthier individuals will have lower premiums compared to those who are older or have pre-existing health conditions.

For reference, a standalone critical illness insurance policy that pays $50,000 is roughly $35 to $45 for healthy individuals on a 10-year term.

Note that many life insurance policies will allow you to purchase critical illness insurance as a rider (add-on). By doing this, your monthly premiums could be lower.

How much critical illness insurance do I need?

Many insurance experts think of critical illness insurance as a lump sum payment that will help you with your day-to-day expenses while you focus on your recovery. You want to ensure you have enough cash available for three to six months worth of expenses. Some expenses could include:

• Mortgage or rent payments
• Utility payments
• Oustanding debt payments
• Groceries
• Child care 
• Living expenses
• Domestic help

Let’s say your monthly expenses are $5,000. Then you would likely want $15,000 – $30,000 in critical illness insurance.

Basically, you should think of your critical illness insurance as your emergency fund. That said, getting a critical illness insurance policy may not be necessary if you already have an emergency fund saved.

However, some people like having a critical illness insurance policy in place as it can help cover medical costs that their provincial health plan may not cover.

Who should get critical illness insurance?

In reality, not everyone needs critical illness insurance. You should only consider it in the following situations:

• You have dependents that rely on your income
• People with limited benefits health insurance
• Freelancers, entrepreneurs, and self-employed individuals
• Anyone looking to supplement their insurance
• Those concerned about future medical issues
• Individuals that lack an emergency fund

Since critical illness insurance is another form of insurance, it’s ideal for anyone that has dependents. If you were to ever become sick and unable to work, that could be disastrous for you and your dependents. Critical illness insurance gives you a buffer during your recovery.

What’s the difference between critical illness and disability insurance?

Critical illness and disability insurance are two different types of insurance products. Critical illness pays you a lump sum when you’re diagnosed with a critical illness, whereas disability insurance replaces a portion of your lost income.

Most people will argue that disability insurance is more important since it covers you for various reasons, such as mental health or disability. Even though your disability insurance won’t pay your full salary, it could provide enough income where your lifestyle doesn’t change.

Think of it this way, disability insurance covers you from a loss of income, whereas critical illness provides you with a payout meant to help you get back on your feet. Disability insurance will continue to pay you even if you can’t work anymore.

How to get critical illness insurance

Critical illness insurance can be purchased from a licensed insurance agent or broker. These brokers will usually be licensed to sell other insurance products too, so they can advise you on what options you have based on your needs.

Another option is to apply for critical illness insurance online via a company such as PolicyMe. In most cases, you need to answer a few questions about your health and lifestyle to be approved. If PolicyMe needs additional information, they’ll contact you.

Once you have selected your coverage, term, and been approved, your policy will be sent to you. You’ll get a chance to review everything before you commit. Only once you’re ready will you be required to make a payment.

Many people don’t realize that some of the best travel insurance credit cards in Canada provide you with enough coverage that another policy isn’t required. Whether you are a frequent traveller or planning a once-in-a-lifetime trip, understanding the various options can help you make an informed decision that best suits your travel needs.

National Bank World Elite Mastercard

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• $150 annual fee
• Earn 5 points per $1 spent on grocery and restaurant purchases up to $2,500 per month. Then earn 2 points per $1 spent
• Earn 2 points per $1 spent on gas, electric vehicle charging, recurring bills and à la carte Travel
• Earn 1 point per $1 spent on all other purchases
• Unlimited access to National Bank Lounge at Montreal-Trudeau airport
• Annual $150 travel credit

National Bank World Elite Mastercard travel insurance

• Emergency Medical Insurance – $5,000,000 – 60 days under age 55, 31 days for ages 55 – 64, 15 days for 65 – 75
• Trip Cancellation – $2,500 per person
• Trip Interruption – $5,000 per person
• Flight Delay Insurance $500 per person – 4 hours 
• Baggage Delay Insurance $500 per person – 6 hours 
• Lost or Stolen Baggage Insurance – $1,000 per person
• Car Rental Theft Damage Insurance – $65,000 – 48 days

The National Bank World Elite Mastercard is the best travel insurance credit card in Canada. When you consider the number of days covered, especially for those aged 55+, there’s no real comparison. All the other included travel insurance is also quite generous.

The earning rate is 5 points per $1 spent on groceries and restaurants (up to $2,500 per month, then 2 points per $1 spent), 2 points on gas, electric vehicle charging, recurring bills and à la carte Travel, and 1 point per $1 spent on everything else.

The annual fee is $150, but you also get an annual $150 travel credit. This is a great choice for anyone looking for comprehensive travel and insurance and for those based out of YUL since you get unlimited access to the National Bank VIP lounge at the YUL International terminal.

American Express Platinum Card

• $799 annual fee
• Earn 90,000 Membership Rewards points when using a referral link and spending $10,000 in the first 3 months
• 50,000 additional points when making any purchase in months 15 – 17
• Earn 2 points per $1 spent on dining and travel, and 1 point on all other purchases
• $200 annual travel credit
• $200 annual dining credit (per calendar year)
• Unlimited airport lounge access
• MESSAGE ME FOR A REFERRAL LINK

American Express Platinum Card travel insurance

• Emergency Medical Insurance – $5,000,000 – 15 days under age 65
• Trip Cancellation – $2,500 per person / $5,000 total
• Trip Interruption – $2,500 per person / $5,000 total
• Flight Delay Insurance $1,000 per person – 4 hours 
• Baggage Delay Insurance $1,000 per person – 6 hours 
• Lost or Stolen Baggage Insurance – $1,000 combined per occurrence
• Car Rental Theft Damage Insurance – $85,000 – 48 days
• Hotel/Motel Burglary Insurance – $1,000 per occurrence

Although the American Express Platinum Card comes with just 15 days of coverage for travel medical insurance, it does have one of the highest maximum payouts of $5,000,000. I like that this card provides up to $2,500 in trip interruption per person. This is relevant as many other cards only offer $1,000. That may not sound like much of a difference, but considering the cost of hotels, $1,000 doesn’t go very far.

What really makes this card stand out for travellers is the included benefits. The primary cardholder and one guest get unlimited airport lounge access via the American Express Global Lounge Collection. In addition, you get hotel status upgrades at Marriott and Hilton.

The annual fee of $799 will turn some people off, but you get an annual travel credit of $200, a yearly dining credit of $200, unlimited lounge access, and a massive signup bonus of American Express Membership Rewards points (when using a referral link) which will appeal to frequent travellers. 

American Express Membership Rewards are highly valuable as you can transfer them to Aeroplan at a 1:1 ratio and Marriott Bonvoy at a 1:1.2 ratio.

RBC Avion Visa Infinite Card

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• $120 annual fee
• 35,000 Avion points on approval
• 20,000 Avion points when spending $5,000 in the first 6 months
• 15,000 Avion points when keeping your account open until month 16
• Earn 1.25 Avion points for every $1 spent on travel purchases
• Earn 1 Avion point per $1 on all other purchases
• Comprehensive travel insurance
• Mobile device insurance up to $1,500

RBC Avion Visa Infinite Card travel insurance

• Emergency Medical Insurance – Unlimited – 15 days under age 65, 3 days for 65+
• Trip Cancellation – $1,500 per person / $5,000 total
• Trip Interruption – $5,000 per person / $25,000 total
• Flight Delay Insurance $250 per person – 4 hours 
• Baggage Delay/Lost Insurance $500 per person – 4 hours 
• Lost or Stolen Baggage Insurance – $1,000 combined per occurrence
• Car Rental Theft Damage Insurance – $65,000 – 48 days
• Hotel/Motel Burglary Insurance – $2,500 per occurrence

The RBC Avion Visa Infinite Card is unique because it offers unlimited travel medical insurance. It’s highly unlikely that you’ll ever need that much coverage, but it’s a good benefit. What’s also interesting about this card is that the trip interruption insurance is quite high at $5,000 per person and $25,000 total. Again, it’s unlikely you’ll ever need to make a claim that high, but it’s worth mentioning. However, the flight delay and baggage insurance is relatively low. 

The good thing about the RBC Avion Visa Infinite credit card is that it typically has a generous welcome bonus, and the annual fee is often waived for the first year. That said, the earning rate is not the best at 1.25 Avion points per $1 spent on travel and 1 point per $1 spent on everything else.

RBC Avion is one of the better travel rewards programs, as you can transfer your points to WestJet Rewards or British Airways Avios.

American Express Gold Rewards Card

• $250 annual fee
• Earn 5,000 Membership Rewards points when spending $1,000 each month for 12 months (60,000 points total)
• 10,000 additional points when using a referral link and spending $4,000 in the first 3 months
• Earn 2 Membership Rewards points per $1 spent on grocery, gas, pharmacy, and travel purchases
• Earn 1 Membership Rewards point per $1 spent on all other purchases
• $100 Annual travel credit
• Priority Pass Membership + 4 annual Plaza Premium passes
• MESSAGE ME FOR A REFERRAL LINK

American Express Gold Rewards Card travel insurance

• Emergency Medical Insurance – $5,000,000 – 15 days under age 65
• Trip Cancellation – $1,500 per person / $3,000 total
• Trip Interruption – $5,000 per person / $6,000 total
• Flight Delay Insurance $500 per person – 4 hours 
• Baggage Delay Insurance $500 – 6 hours 
• Lost or Stolen Baggage Insurance – $500
• Car Rental Theft Damage Insurance – $85,000 – 48 days
• Hotel/Motel Burglary Insurance – $500 per occurrence

The American Express Gold Rewards Card is a mid-tier travel rewards card from American Express. The travel insurance is better than the American Express Cobalt, but not as good as the Platinum Card.

The welcome bonus on this card is typically worth between 40,000 – 60,000 American Express Membership Rewards Points, but it’s typically broken up into monthly awards based on meeting a minimum spending requirement. The earning rate is respectable at 2 points per $1 spent on travel, gas, groceries, and drugstores. All other purchases earn you 1 point per $1 spent.

The American Express Gold Rewards Card serves frequent travellers with its annual $100 travel credit and four complimentary visits per calendar year to Plaza Premium Lounges. Plaza Premium has lounges in most Canadian airports, so it won’t be hard to use them all up. The annual is $250, but the perks included are easily worth more than that.

Scotiabank Passport Visa Infinite Business* Card

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• $199 annual fee
• 30,000 Scene+ points when spending $5,000 in the first 3 months
• 10,000 points when spending $60,000 in the first year
• Earn 1.5 Scene+ points per $1 spent on all purchases
• Visa Airport Companion Program membership + 6 free passes per year
• No foreign transaction fees

Scotiabank Passport Visa Infinite Card travel insurance

• Emergency Medical Insurance – $2,000,000 – 25 days / 3 days if you’re 65 or older
• Trip Cancellation – $1,500 per person / $10,000 total
• Trip Interruption – $2,500 per person / $10,000 total
• Flight Delay Insurance $500 per person – 4 hours 
• Baggage Delay/Lost Insurance $1,000 – 4 hours 
• Car Rental Theft Damage Insurance – $65,000 – 48 days
• Hotel/Motel Burglary Insurance – $1,000 per occurrence

The Scotiabank Passport Visa Infinite Card is an appealing option for travellers since it’s arguably the best all-around travel rewards credit card. The travel insurance is pretty good since you get 25 days if you’re under the age of 65. Additionally, you only need to charge 75% of your trip costs to get your trip cancellation and insurance coverage.

Other travel benefits include six complimentary lounge visits per year via the Visa Airport Companion Program and no foreign exchange fees. In fact, this is the only credit card in Canada that has good travel insurance and no foreign exchange fees.

The annual fee of $150 is reasonable, and the earning rate is respectable. Scene+ points are flexible too, since you can redeem your points on any travel purchase charged to your card.

BMO Ascend World Elite* Mastercard®*

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• $150 Annual fee – First year free*
• Get 45,000 BMO Rewards points when you spend $4,500 in the first 3 months, and 3,750 points for each subsequent month in which you make at least $2,500 in purchases on your card, for 12 months
• Earn 5 BMO Rewards points per $1 spent on travel
• Earn 3 BMO Rewards points per $1 spent on dining, entertainment, and recurring bills
• Earn 1 BMO Rewards point per $1 spent on all other purchases
• Complimentary membership in Mastercard Travel Pass provided by DragonPass, plus 4 annual passes

BMO Ascend World Elite Mastercard travel insurance

• Emergency Medical Insurance – $5,000,000 – 21 days if under 65
• Trip Cancellation – $1,500 per person / $5,000 total
• Trip Interruption – $2,000 per person / $10,000 total
• Flight Delay Insurance – $500 per person – 6 hours 
• Baggage Delay/Lost Insurance – $500 per person, up to $1,000 – 6 hours 
• Car Rental Theft Damage Insurance – $65,000 – 48 days
• Hotel/Motel Burglary Insurance – $1,000 per occurrence

The BMO Ascend World Elite Mastercard is popular for travellers seeking insurance benefits. It offers unlimited trips per year with coverage for journeys up to 21 days if you’re under 65. The card provides coverage up to $5 million for eligible medical expenses. This makes it a strong contender for frequent travellers.

You could argue that this is the best credit card with travel insurance since you only need to charge a part of your ticket to your card for your insurance to apply. That’s right; according to the fine print, you could even charge just $1 of your travel expenses to your card, and your insurance would be valid. Note that this doesn’t apply to car rental damage, where you need to charge the entire rental amount to your card for the insurance to apply.

Because of this clause, the BMO World Elite Mastercard is a great choice for those who often book flights on reward miles and still want a comprehensive travel insurance package. Oh, it helps that this card waives the annual fee for the first year (one of the few credit cards with travel insurance that does this), and the sign up bonus is usually quite good.

TD Aeroplan Visa Infinite Privilege Card

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• $599 annual fee
• Earn 20,000 Aeroplan points after your first purchase
• Earn 35,000 Aeroplan points when you spend $12,000 in the first 180 days
• Earn a one-time anniversary bonus of 30,000 Aeroplan points when you spend $24,000 within 12 months of account opening
• Earn 2 Aeroplan points per $1 spent on Air Canada purchases, 1.5 points on gas, and groceries, and 1.25 points on all other purchases
• First bag checked free, priority check-in & boarding on Air Canada flights
• Maple Leaf Lounge access in North America
• Visa Airport Companion Program + 6 free annual passes

TD Aeroplan Visa Infinite Privilege Card travel insurance

• Emergency Medical Insurance – $5,000,000 – 31 days, 4 days if you’re 65+
• Trip Cancellation – $2,500 per person / $5,000 total
• Trip Interruption – $5,000 per person / $25,000 total
• Flight Delay Insurance $1,000 – 4 hours 
• Baggage Delay/Lost Insurance – $500 per person, up to $2,500 – 4 hours
• Car Rental Theft Damage Insurance – $85,000 – 48 days
• Hotel/Motel Burglary Insurance – $2,500 per occurrence

The TD Aeroplan Visa Infinite Privilege Card is a premium travel credit card with a hefty $599 annual fee. That said, you get some incredible Air Canada benefits, such as Maple Leaf Lounge access, free checked bags, and zone 2 boarding. For many people, these benefits are worth the annual fee.

As for the travel insurance, it’s quite generous overall. Interestingly enough, if you dive into the included trip interruption insurance details, you’ll learn that you can claim up to $250 a day in hotels. This is relevant as many other cards, including some premium cards, only cover $100 a day.

Using the TD Aeroplan Visa Infinite Privilege Card, you earn Aeroplan points on everyday purchases, which can be redeemed for flights, upgrades, and even hotels. If you fly Air Canada frequently, this card is an excellent candidate for your wallet.

CIBC Aventura Visa Infinite Card

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• $139 annual fee – First year free
• 15,000 Aventura points when you make your first purchase
• 20,000 Aventura points when you spend $3,000 in the first 4 months
• Earn 2 points per $1 spent on CIBC travel
• Earn 1.5 points per $1 spent on gas, grocery, and drug store purchases
• Earn 1 points per $1 spent on all other purchases
• Visa Airport Companion Program membership and 4 free annual passes

CIBC Aventura Visa Infinite Card travel insurance

• Emergency Medical Insurance – $5,000,000 – 15 days, 3 days if you’re 65+
• Trip Cancellation – $1,500 per person / $5,000 total
• Trip Interruption – $2,000 per person / $25,000 total
• Flight Delay Insurance $500 – 4 hours 
• Baggage Delay/Lost Insurance – $500 per person – 6 hours
• Car Rental Theft Damage Insurance – $65,000 – 48 days
• Hotel/Motel Burglary Insurance – $2,500 per occurrence

With the CIBC Aventura Visa Infinite Card, you get flexibility and perks suited for frequent travellers. This card allows you to earn Aventura points on everyday purchases, which you can redeem for travel expenses and more. 

The included travel insurance is standard for a mid-tier credit card. Admittedly, there are cards with better travel insurance, but this is a good option if you’re a CIBC customer.

On a positive note, the Visa Airport Companion Program membership provides four free airport lounge passes each year. The annual fee is $139, but it’s often waived for the first year.

Rogers Red World Elite Mastercard

• No annual fee
• $60 cash back when you make a mobile wallet purchase within the first 90 days and 6 automatic payments within the first 8 months for your Rogers, Fido or Shaw postpaid service
• 2% cash back on all non-U.S. dollar purchases if you have 1 qualifying service with Rogers, Fido or Shaw – 1.5% if you’re not a customer
• 3% cash back on purchases made in U.S. dollars.
• 1.5x more cash back every time you redeem for Rogers, Fido or Shaw purchase
• 5 Roam Like Home days

Rogers Red World Elite Mastercard travel insurance

• Emergency Medical Insurance – $1,000,000  – 15 days under age 65, 3 days for 65+
• Trip Cancellation – $1,00 per person / $5,000 total
• Trip Interruption – $1,000 per person / $25,000 total
• Car Rental Theft Damage Insurance – $65,000 – 48 days

Of my list of the best travel insurance credit cards in Canada, the Rogers Red World Elite Mastercard is the only one with no annual fee. It also happens to be one of the best cash back credit cards in Canada. 

The Rogers Red World Elite Mastercard gives you 3% cash back on purchases made in U.S. dollars and 2% cash back on everything else if you’re a Rogers, Fido or Shaw customer. However, if you redeem your cash back earned for a Rogers, Fido, or Shaw product or service, you get 1.5X more cash back. That means you could earn up to 4.5% cash back with this card. 

As for the travel benefits, it’s surprising to see trip cancellation and interruption insurance included with a no fee card, so this is a major win.

How credit card travel insurance works

Credit card travel insurance offers various forms of protection during your travels. Understanding the types of benefits, the duration they cover, and the conditions under which they apply is crucial for making the most of these insurance offerings.

Coverage benefits explained

Credit card travel insurance can provide various benefits. Emergency medical coverage covers hospital and physician fees, which is particularly important considering the high cost of healthcare in some countries.

Trip cancellation insurance reimburses non-refundable expenses when a trip can’t be completed. In contrast, trip/flight delay insurance covers additional costs incurred due to unforeseen delays, such as hotel stays and meals.

Additionally, some cards offer baggage loss or delay insurance. This helps replace items as you can purchase new stuff and get reimbursed. Rental car insurance is also frequently included, covering theft or damage but not liability. Each benefit has specific terms and limits, which are detailed in the certificate of insurance. You should review your policy to know exactly what you’re covered for.

Length of trip

The duration of coverage varies by credit card. Most cards cover 15 – 21 days, but you can get up to 31 days. That said, coverage for those 65+ is typically short at 3 days.

Some cards allow you to extend your coverage for an additional cost, but not all cards allow this. Going even a day without travel insurance is a risk, so get additional coverage even if you have to pay it.

When benefits apply

There are certain conditions for your benefits to apply. For example, you can only claim trip cancellation for a qualifying reason, such as death. You can’t just cancel your trip and expect a full refund because you changed your mind.

You need to wait four to six hours before you’re eligible to make purchases for some expanded travel benefits, such as trip delay and baggage delay insurance. If you are making purchases, be sure to save your receipts and documents showing the delay, as you’ll need them when making a claim later.

Eligibility requirements

As odd as it sounds, the eligibility requirements for each type of insurance can be different. For some of your policies to apply, you may need to charge a certain amount of travel costs to your card. This is another reason why you need to read the certificate of insurance.

Travel medical insurance

The good news about emergency travel medical insurance is that you get it no matter what. No purchases need to be charged to your card for you to be covered. That said, don’t forget that your policies have a length and age limit.

Extended travel insurance

Extended travel insurance is where things can get complicated. Some policies may state that you need to charge the full amount of your costs to your credit card, while others might only require 75% of your trip costs to be charged.

To further complicate things, it can vary depending on the type of insurance. For example, for car theft damage and hotel/motel burglary, you usually need to charge the full costs of those expenses to your card for your insurance to apply.

Bookings on rewards

When booking travel on points or miles, such as Aeroplan or RBC Avion Rewards, you must charge any remaining taxes or fees to a credit card that earns you the same points for your travel insurance to apply.

For example, if you booked on Aeroplan, you must pay any remaining balance with an Aeroplan credit card. 

However, if you decide to pay the taxes for that flight with the RBC Avion Visa Infinite Card, your insurance will not apply since you didn’t pay for the full flight with your card. 

There is one exception to this rule. If your credit card insurance says you need to charge any amount for your insurance to apply, then you’d still be covered. It’s crucial to understand these rules to fully benefit from your card’s travel insurance offerings.

How to make a credit card travel insurance claim

When using your credit card travel insurance, it’s crucial to follow the correct steps for making a claim. Understanding different procedures for when you are abroad and after you return home ensures you’re covered in unexpected situations.

Making a claim when abroad

If you encounter an issue while travelling, reporting it as soon as possible is important. Contact your credit card insurance provider as soon as possible and have your card details ready.

In most cases, the travel insurance provider will want to get the details of the claim before any charges are made. This can be beneficial as often, the medical providers can bill your insurance provider directly, which means no out-of-pocket expenses for you.

Contacting your insurance provider is also helpful, as they can provide you with assistance. For example, they can find a partner medical centre that can treat your injury.

In all situations, you should gather all necessary information related to the incident. This includes any medical reports, police statements, and receipts. Most providers require prompt notification, typically within 48 hours of the event.

Document everything thoroughly. Photograph damaged items, save emails, and write detailed descriptions of incidents. This will help when filing your claim and ensure nothing is overlooked.

Making a claim after returning home

Once you’re back in Canada, double-check the documents you collected during your trip. Most claims are now made online, and accurate records improve your chances of approval. 

Include copies of all supporting documents like receipts, flight delay reasons, tickets, boarding passes, and correspondence. Original documents should stay with you, while duplicates go with your claim. 

When filing online, you should get a claim reference number pretty quickly. Be prepared to provide additional information or clarification if requested, even if it seems repetitive. Keep track of all interactions in case you need this information down the line.

Once your claim has been assessed, you’ll receive a cheque for any eligible expenses. The entire process can take four to ten weeks.

Tips for choosing the best travel insurance credit card

When selecting a credit card with travel insurance, consider the extent of the coverage offered. Some cards provide comprehensive insurance, including trip cancellation, baggage delay, and hotel/motel burglary, while others don’t.

Check for any exclusions or limitations in the insurance policy. Cards often have conditions that may affect coverage, such as age limits or trip duration caps.

Evaluate the card’s annual fee. A higher fee typically means you get more extensive coverage and better rewards. Compare this to a lower-fee card to determine which offers the best value for your travel needs.

Examine additional perks like airport lounge access, free baggage, or status upgrades, which can enhance your travel experience.

Determine if foreign exchange fees are important to you. If you’re going to be spending a lot, those fees can add up. It might be a good idea to consider a card with no foreign transaction fees and good travel insurance.

Is a separate travel insurance policy better?

When considering travel insurance, you may wonder if credit card travel insurance is good enough or if getting a standalone product from an insurance provider such as TuGo or Manulife would be better. Generally, standalone products are better.

A key benefit of separate travel insurance is comprehensive coverage. Standalone policies often typically provide higher limits for trip cancellation and medical expenses, which might surpass the coverage offered by travel credit cards. 

More importantly, the underwriting for standalone policies is done at the time of application. That’s where you answer questions about your medical history. With credit card travel insurance, the underwriting is done at the time of the claim, which could leave reasons for the insurance provider to deny your claim.

Credit card travel insurance is convenient and free. However, standalone policies may offer more flexibility. You can customize coverage to your specific needs, whether by extending coverage duration or adding options like extreme sports protection.

Standalone travel insurance can also cover gaps in your credit card’s policy. For instance, if your credit card covers 3 days of travel for seniors, but your trip lasts longer, a separate policy can fill the void. This ensures you aren’t vulnerable to unexpected costs during your travels.

In deciding whether a separate policy is ideal, assess your travel habits and specific coverage needs. Evaluate factors such as trip frequency, duration, and potential risks. Credit card travel insurance is likely enough if you’re young and healthy. However, once you get to age 55 where credit card travel insurance isn’t as good, or you start to have health issues, a standalone policy is the way to go.

Frequently Asked Questions

What are the top travel insurance coverage options offered by Canadian credit cards?

Canadian credit cards often offer options like emergency medical coverage, trip interruption insurance, lost baggage insurance, and flight delay insurance. 

How can senior travellers over 65 find the best travel insurance credit cards in Canada?

For senior travellers, some cards offer tailored coverage. The National Bank World Elite Mastercard, for example, provides emergency medical insurance for trips up to 15 days for seniors over 65. That said, it’s usually better for seniors to purchase a standalone policy.

Which Canadian credit cards offer trip cancellation insurance as a benefit?

Trip cancellation insurance is a common feature in many premium cards, such as the American Express Gold Reward Card, the RBC Avion Visa Infinite Card, and the TD Aeroplan Visa Infinite Privilege. This benefit covers non-refundable trip expenses if you cancel due to covered reasons, such as illness or emergencies.

Is credit card travel insurance or a separate travel insurance policy better?

Credit card insurance is convenient and often cost-effective if you travel frequently. However, standalone travel insurance policies can offer more comprehensive coverage and may be a better fit if you have specific needs, are a senior, or are planning extended trips. 

Are there any credit cards in Canada that provide travel insurance without an annual fee?

While most cards with comprehensive travel insurance benefits charge an annual fee, some may waive the fee for the first year or have a yearly fee. That said, the travel insurance included on cards with no annual fee is usually limited.

Regardless of your life event, Balance Protector RBC will cover your monthly bill so you don’t go into debt. The problem is that BalanceProtector insurance is incredibly expensive, and better options exist. To make an informed decision about this type of insurance and if you need it, you need to know the ins and outs.

What is Balance Protector RBC?

Balance Protector RBC is designed to help you with your credit card debt in the event of significant life challenges. Essentially, this insurance covers your credit card payments when you can’t make them yourself due to one of the following situations:

• Job Loss: Your credit card payments may be covered if you’re laid off.
• Disability: Should you become disabled, this insurance can help you with your payments.
• Loss of life: In the unfortunate event of death, your balance will be paid off, so your family doesn’t need to worry about any missed payments.

RBC BalanceProtector Max Insurance Coverage

While RBC BalanceProtector Max may sound like a good deal, when you look at the actual coverage, you may realize that you’re not completely protected. That’s because there are limits to how much you’ll get paid out.

Job loss coverage

If you lose your job, BalanceProtector Max covers 25% of your account balance, up to a maximum of $6,250 each month, for up to four months. That works out to a maximum payout of $25,000. Note that a qualifying job loss includes being laid off, dismissal without cause, and strike or lockout. If you’re self-employed, you can also qualify for the payment if your business fails or you’re forced to close for at least 30 days due to Provincial or Federal Government policy.

Total Disability

Suppose you’re considered totally disabled by your doctor, and it prevents you from performing the regular duties of your employment. In that case, you’d qualify for the 25% account balance coverage, up to a maximum of $6,250 monthly, for up to four months. If you’re only partially disabled, then the insurance wouldn’t apply.

Life

In the event that you pass away, a single payment of up to $25,000 will be paid. Note that no benefit will be paid if the death is from suicide within six months of adding this insurance policy.

RBC BalanceProtector Max Premiums and Payments

The RBC BalanceProtector Max premiums sound reasonable initially, but when you add everything up, you’ll realize you’re paying a lot to be covered.

It costs “just” $1.20 per $100 of your account balance. That means if your monthly bill is $1,000, you’ll pay $12. If your bill is $2,000, your BalanceProtector premium is $24. No premiums apply if your bill is $10 or less for the month. Also, if you’re 66 or older, you don’t qualify for total disability and job loss coverage anymore, so your monthly premium is reduced to $.60 per $100 of your account balance.

These premiums are automatically added to your monthly statement, so you’ll pay it at the same time.

RBC BalanceProtector Max Eligibility

To qualify for RBC’s optional balance protection insurance, you must meet the following qualifications:

• Have an eligible RBC Royal Bank credit card, such as the RBC Avion Visa Infinite
• Be a resident of Canada
• Be the primary cardholder
• Be between the ages of 18 and 64
• Employed or self-employed

Making a RBC BalanceProtector Claim

If you need to make a claim, you should contact RBC’s claim agents immediately. Generally, you’ll be required to provide proof of eligibility, such as a doctor’s note or record of employment. Once approved, payments will be made, up to the monthly maximum limits.

Since a claim won’t be approved until all your paperwork is in order, there’s always a chance that you won’t get paid when you no longer have an income. In addition, you’ll still be charged monthly premiums if you’re making any new charges to your account.

Is RBC Balance Protector Worth It?

In most situations, RBC BalanceProtector Max is not worth it. Not only is it expensive, but the premiums you get paid are capped. Even the maximum payout of $25,000 upon your death is a bit silly. You’ll already be dead, so it’s not like you can pay them anyway. Your family would only be responsible for your debt if they co-signed for the credit card. RBC can’t go over family members or supplementary users for any remaining balance.

BalanceProtector Max alterantives

Instead of getting credit card balance protection from RBC, you’d likely be better off with something else, such as:

• Emergency fund: Try to build an emergency fund of 3 – 6 months worth of expenses. If anything happens, you’ll have enough money to cover things beyond just your credit card bill.
• Disability insurance: The cost of disability insurance is realtively low and it pays signifnicaly more than credit card balance protection insurance. It also lasts a lot longer.
• Term life insurance: If you’re young and healthy, term life insurance is often less than $30 a month for for a policy that pays $500,000 to $1,000,000.

How to Apply for RBC BalanceProtector Max

Applying for RBC BalanceProtector Max is a straightforward process. When you activate an eligible RBC credit card, the last screen asks if you want to add BalanceProtector Max. You must accept or decline it before your credit card becomes active.

Alterantively, you can follow these steps:

1. Sign into your RBC Online Banking account
2. Click on one of your eligible RBC credit cards
3. On the right sidebar, click “Get/View Balance Protection Insurance”
4. Click “get covered”
5. Read the documentation and agree to the terms and conditions.

Your coverage starts immediately upon confirmation.

Frequently Asked Questions

How does the BalanceProtectorMax from RBC work?

You’ll pay $1.20 in premiums per $100 of your monthly bill. This insurance covers job loss, total disability, and loss of life. The maximum payout is $6,250 each month for up to four months.

How do I file a claim with the RBC Balance Protector?

To file a claim, you need to contact RBC’s insurance department directly. They’ll ask you for supporting documents so they can process the claim.

How can I cancel my Balance Protector RBC?

You may cancel your BalanceProtector Max plan at any time by contacting RBC through customer service They’ll also be able answer any outstanding questions you may have about your coverage.

What is the process for receiving a refund on my BalanceProtector premiums?

If you believe you didn’t sign up for BalanceProtector Max, call RBC immediately to request a refund. If they claim that you did opt in for the service, ask them to prove it by providing a voice transcript or your agreement to the terms online. If you signed up by accident, you can still ask for a refund if you contact them immediately.

How do I contact RBC about BalanceProtector Max?

You can go online, visit an RBC branch, or call 1.800.769.2512 for assistance.

I would argue that my biggest mistake was not having enough insurance. I only looked into it because one of my clients required me to have a policy before I could be onboarded. It seems like I’m not the only one with this thinking, as a recent TD Survey found that many freelancers, entrepreneurs, and small business owners haven’t taken appropriate action to protect their businesses. I spoke with Tang Hung Trang, Vice President, Small Business Insurance at TD Insurance and he explains everything you need to know about small business insurance.

How important is it for solopreneurs and small business owners to have insurance? 

Whether you run a hair salon or own your own photography studio, it can take a lot to run your small business. Business owners have the passion and drive to take on challenges, but they also need to protect what they’ve worked so hard to build. One way for small business owners to financially protect themselves from unforeseen events is through a customized business insurance policy. 

A recent TD Insurance survey revealed that many small businesses are not taking the right steps to protect their business, putting themselves and their business at a greater risk for unexpected costs. Just over half of small businesses with one or more employees have small business insurance protection. This is even lower among solopreneurs (entrepreneurs who are the only employee of their business), where only 33 per cent have small business insurance protection.  

What about freelancers who only work at home? Do they need insurance? Does their home insurance cover them? 

Small business owners may believe that they don’t need insurance. For example, those who run a business out of their home may assume their homeowner’s insurance policy covers them, but that’s not always the case. The coverage limits in a standard home insurance policy may be much lower than the coverage you would receive through a business insurance policy. There are also certain types of coverage that your home insurance policy may not cover. For example, if your business is temporarily shut down due to an insured event, you may not be covered for any loss of income during this period.  

Can you explain the difference between professional liability and commercial general liability insurance? 

Commercial General Liability Insurance protects you and your business from financial losses caused by third party claims involving bodily injuries, property damage, as well as personal and advertising injury resulting from your products, services or operations. 

Professional liability insurance, also known as errors and omissions insurance, is financial coverage related to claims associated with inadequate work or negligent action. This may include failing to provide services to a client in an agreed timeframe leading to your client suffering a financial loss.  

Do business owners with employees need more insurance? 

Small Business Insurance should be customized to specific business’ needs, and TD Insurance is set up to help small business owners understand their coverage options and create a tailored insurance plan. We recommend connecting with a licensed TD Insurance Advisor for advice on the right type of insurance that meets the unique needs of their business.  

What’s the biggest misconception about insurance? 

Many small business owners may not realize that they are not currently insured. For example, many business owners believe their personal auto policy automatically includes coverage for commercial usage, but that is not always the case. Often, small business owners require clarity on the insurance coverages they require for their business. This is supported by a recent TD Insurance survey, where 1 in 3 small business owners indicated they have a weak understanding of the types of insurance coverages specific to their businesses.   

How much does small business insurance cost in general? 

The cost of insurance is dependent on a range of factors including, but not limited to, the value of the company assets you wish to insure, the specific risks associated with your industry, and your previous claims history. With the recent launch of our digital quoter, we also offer small business owners the ability to get a quote online tailored to their specific business profile. In addition, they can also speak to a licensed TD Insurance advisor to determine the right insurance coverage customized to the unique needs of their business.   

What’s the best way for people to get more information about insurance for their business needs? 

Like I mentioned, we recommend for small business owners to speak with one of our licenced TD Insurance Advisors to learn more about our small business insurance products or visit TD Insurance for Business for more information.  

Final thoughts

Small business insurance is no different from any other type of insurance. You hope you never need to use it, but you’ll be glad that you have it if you ever need to make a claim. What I’ve personally noticed as of late is that most of my clients require me to be insured before they take me on as a contractor. Small business insurance is relatively inexpensive and it counts as a business expense. It’s worth noting that small business insurance isn’t the only type of insurance you may need. You should also look into disability insurance, life insurance, and critical illness insurance.

Note that you also need to read the fine print of your credit card insurance policies. In most cases, you need to decline the insurance offered by the car rental agency for your credit card policy to apply. It’s also worth mentioning that credit card insurance doesn’t typically provide third-party liability insurance, but your car rental agency has to give you a minimum amount based on local laws. That said, it may not be enough so there are times where buying an additional policy might make sense.

The best credit cards with free rental car insurance in Canada

American Express Business Platinum Card

• $799 annual fee
• Earn 80,000 Membership Rewards points with a referral link when spending $15,000 in the first 3 months when using a referral link
• 40,000 additional points when making any purchase in months 14 – 17
• Earn 1.25 points per $1 spent on all purchases
• Unlimited airport lounge access
• $200 annual travel credit
• $120 annual wireless credit
• Marriott Bonvoy Gold Elite Status
• MESSAGE ME FOR A REFERRAL LINK

I’ve included the American Express Platinum Canada Card on this list since it’s one of the best travel credit cards in Canada. Not only that, but the American Express car rental insurance is excellent since it covers you for up to 48 days of consecutive travel with an MRSP of $85,000. This is on the higher end of the credit card rental car insurance so if you hold this card, know that you’re covered.

If you’ve been hesitant to apply for the American Express Platinum Canada Card due to the high annual fee of $699, I can tell you the card is worth it since you get a sign up bonus that’s usually worth at least $1,000.

What many people don’t realize is that American Express Membership Rewards is one of the best travel rewards programs. You can convert your points to Aeroplan at a 1:1 ratio or 1:1.2 if you want Marriott Bonvoy points. Once those points are converted, you could easily get some high value redemptions. If that wasn’t enough, you also get a yearly travel credit of $200, unlimited lounge access, hotel status upgrades and more.

BMO Ascend World Elite* Mastercard®*

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• $150 Annual fee – First year free*
• Get 45,000 BMO Rewards points when you spend $4,500 in the first 3 months, and 3,750 points for each subsequent month in which you make at least $2,500 in purchases on your card, for 12 months
• Earn 5 BMO Rewards points per $1 spent on travel
• Earn 3 BMO Rewards points per $1 spent on dining, entertainment, and recurring bills
• Earn 1 BMO Rewards point per $1 spent on all other purchases
• Complimentary membership in Mastercard Travel Pass provided by DragonPass, plus 4 annual passes

What makes the BMO World Elite* Mastercard®* a good choice as a credit card with car rental insurance is that it’s a premium that has no annual fee for the first year. Normally, you’d pay $150 for the yearly fee, but it’s waived for the first year. On top of that, the welcome bonus is usually quite generous. The included rental car insurance covers you for 48 days as long as the MRSP of the rental car does not exceed $65,000.

What’s also nice about this card is that you get a Mastercard Airport Experiences membership provided by LoungeKey, plus 4 annual free passes. Think about all those benefits for a second. You can basically use the welcome bonus to offset your car rental costs, you get car rental insurance, and you get airport lounge access. All of this is free for the first year.

Scotiabank Passport Visa Infinite* Card

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• $150 annual fee
• 40,000 Scene+ points when spending $2,000 in the first 3 months
• 10,000 points when spending $10,000 in the first six months
• Earn 3 Scene+ points per $1 spent at Empire owned supermarkets
• Earn 2 Scene+ points per $1 spent on eligible grocery stores, dining, entertainment, and daily transit purchases
• Earn 1 Scene+ point per $1 spent on all other eligible purchases
• Visa Airport Companion Program membership + 6 passes per year
• No foreign transaction fees

The Scotiabank Passport Visa Infinite Card is very similar to the BMO World Elite Mastercard as they both give you rental car collision/loss damage insurance for 48 days at a maximum MSRP of $65,000. What makes the two cards different are the additional benefits that the Scotiabank card gives you. You’ll get six free annual lounge passes and the card has no foreign transaction fees. Those extra perks are great, but Scotiabank Passport Visa Infinite Card’s annual fee of $139 is not waived for the first year.

It’s also worth mentioning that Scotia Rewards is slightly better than BMO Rewards. With Scotia Rewards, you can redeem your points for any type of travel including things you find that aren’t on the Scotiabank travel portal. That means if you find a cheaper car rental on Expedia or directly with the rental car agency, you can charge the purchase to your Scotiabank card and then redeem points later at full value. This flexibility can be quite handy.

Scotia Momentum Visa Infinite Card

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• $120 annual fee – first year free
• Earn 15% cash back on all purchases for the first 3 months (up to $2,000 in purchases)
• Earn 4% cash back on groceries, recurring bills and subscription purchases
• Earn 2% cash back on gas, daily transit and food delivery purchases
• Earn 1% cash back on all other purchases with no cash back limit
• Travel and mobile device insurance included

The Scotiabank Momentum Visa Infinite Card is a cash back card, but it gives you comprehensive travel insurance. Having that combination is rare, that’s why it’s consistently one of the best cash back credit cards in Canada. The rental insurance included is similar to other cards on this list. You’ll be covered for 48 days for vehicles with an MRSP of up to $65,000.

What makes this card stand out are its other benefits. You get an amazing 4% cash back on groceries and recurring bills, 2% on gas and transit purchases, and 1% on everything else. This is one of the highest earn rates for any cash back credit card. Plus, the annual fee of $120 is usually waived for the first year.

Tangerine World Mastercard

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• No annual fee
• Get $100 in cash back when spending $1,500 in the first 3 months.
• 2% cash back on up to 3 categories
• 0.5% cash back on all other purchases
• Mobile device insurance
• Rental car insurance

The Tangerine World Mastercard is an upgraded version of the popular Tangerine Money-Back credit card. This higher tier card may earn you the same amount in cash back, but it now includes free credit card rental car insurance. Your policy covers you for 31 consecutive days of travel and the car rental’s MRSP can’t exceed $65,000. That’s pretty awesome for a credit card with no annual fee.

The earn rate is great at 2% on up to three categories of your choice. You can two categories right away and a third one if you set up your cash back to automatically deposit into your account. All other purchases earn you 0.5% cash back.

You also get mobile device insurance (let’s hope you never need to use it) and Mastercard Airport Experiences Provided by LoungeKey. Although LoungeKey gives you access to many airport lounges, you still need to pay $32USD to enter each time.

What credit card rental car insurance covers

I want to mention right away that your credit card rental car insurance only applies if you decline the auto insurance from the car rental company. That means if you decide to purchase insurance from the car rental company, your credit card car rental insurance is no longer valid.

As you can imagine, every credit card rental car insurance policy is different, but generally speaking, you’d be covered for the following:

• Collision and damage
• Loss/theft
• Towing fees
• Theft 

Unlike travel medical insurance, for your credit card rental car insurance to be valid, you must pay the entire balance of the car rental with your credit card. If you’re using points, you need to charge any outstanding amount to your card.

Depending on the policy, you’ll usually be covered between 31-48 days of consecutive travel and the maximum amount you can claim is based on the MRSP between $65,00 – $85,000

What credit card rental car insurance doesn’t cover

Every credit card rental car insurance policy is different and what you’re not covered is often buried in the fine print, but generally speaking, these are things you’re not covered for.

• Liability insurance
• Days that exceed the maximum days outlined in your policy
• Vehicles that have an MRSP greater than what’s outlined in your policy
• Exotic cars, motorcycles trucks
• Vehicles that are used for commercial purposes
• Accounts that’s aren’t in good standing
• Inebriated driving or illegal activity
• Some countries

This list of free credit card rental car insurance exclusions may seem long, but when you look at it, it makes a lot of sense. The only thing that throws people off is the lack of liability insurance (which you need in case someone sues you for pain and suffering). This may be concerning, but many car rental companies around the world are required by law to include liability insurance with any car rental. That said, the amount required may differ by country. For example, one country may only require $200,000 in liability insurance to be included but if you’re sued for $1,000,000 you might run into an issue.

The other exclusions are pretty understandable but I still want to highlight the fact that most cars beyond sedans, SUVs and minivans are typically not covered. You also can’t use your renal car for commercial purposes. That includes renting an SUV to move your personal possessions across the city. If you did that and got into an accident, your free credit card rental car insurance would not apply.

I don’t think I need to explain why inebriated driving or illegal activity would void your insurance but you should also know that your policy may also become void if you’re travelling to a country with a travel advisory.

Is car rental insurance mandatory?

In most cases, some insurance needs to be provided to car rentals by law. That said, how much coverage you get will depend on the country or even the city you’re renting from. As mentioned, you’re only covered for certain things, so the included insurance often isn’t enough.

However, let’s say you own a vehicle at home that’s insured. Almost every home auto insurance policy covers car rentals, so you wouldn’t need to buy any additional coverage. Make sure you check the details of your policy so you know exactly what you’re covered for.

Final thoughts

While having a credit card with rental insurance is important, not having included liability insurance is problematic. You want to protect yourself, but you also don’t want to pay for any insurance that you don’t need. Check to see if any of the current policies you have already cover you when you’re abroad. If not, credit card car rental insurance is not bad, but it doesn’t cover you from liability.

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