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Critical Illness Insurance - Financial underwriting guidelines
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Printable copy: SLF Financial Underwriting Guidelines - Critical Illness [PDF, 2 pages, 104 kb]

Most clients can be considered for at least $150,000 of Critical Illness (CI) insurance to cover the extraordinary expenses associated with a critical illness.

The maximum amount of CI insurance available on any one life is $2.5 million. This includes all personal and business insurance combinations in force, pending and applied for with all companies.

Personal insurance

Income replacement

Maximum amount of personal insurance available based on age and earned income:

Issue age Maximum available
18 - 55 $250,000 or {10 x earned income + mortgage balance}
56 - 60 $200,000 or {7 x earned income + mortgage balance}
61+ $150,000 or {5 x earned income + mortgage balance}

Note: Sources of earned income generally will include salary, draw and/or bonus. 

Non-income earning spouse

The maximum amount of personal insurance that we will consider for non-income earning spouses will be the highest of:

  • Issue age 16-55: $250,000 or {½ of amount available on the income earning spouse + mortgage balance}
  • Issue age 56-60: $200,000 or {½ of amount available on the income earning spouse + mortgage balance}
  • Issue age 61 and up: $150,000 or {½ of amount available on the income earning spouse + mortgage balance}

University or college students and recent graduates

They may apply for $250,000, regardless of their earned income.  Certain professional studies for occupations where the proposed insured is expected to earn a substantial income (for example a doctor or engineer) can be considered for amounts up to $500,000.

Children

We would generally only consider up to $150,000, regardless of the amount of coverage on their parents. Higher amounts will be considered if both parents have some individual or group critical illness, disability or long term care insurance coverage in force or applied for (unless uninsurable), subject to the following maximums:

Maximum amount of personal insurance coverage available on children:

  • 30 days to 5 years: $500,000
  • 6 to 10 years: $750,000
  • Over age 10:  $1,000,000

Unless uninsurable, siblings should be equally insured, subject to maximums for their ages.

To run an illustration for a face amount over $250,000, please contact Insurance Sales Support by emailing ISS or call the Advisor Service Centre at 1-877-272-2020, option 6, 3, 1.

Retired proposed insureds

Maximum amount of personal insurance coverage available on a retired proposed insured is the lesser of:

  • $250,000, and
  • 4 x the combined unearned income of the two spouses

High net worth proposed insureds

We will consider the base amount available as income replacement; and any mortgage balance on any real estate property; and 25% of their home’s value to a maximum of $250,000.

Employed proposed insureds whose bankruptcies have not been discharged

They may apply for amounts up to $100,000. Benefits are acceptable. This includes all personal and business insurance combinations in force, pending and applied for with all companies. Once the bankruptcy is discharged, we will consider based on our regular income guidelines.

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Business Insurance

Key person insurance 

  • A proposed insured aged 60 years or less will be considered for an amount equal to 7 x their annual salary and bonus.
  • For ages 61 and over, we will use a factor that corresponds with the number of years remaining until the usual retirement age.    

Unless uninsurable all key persons of the business should be insured.  

Business loan insurance

Business loan coverage can be considered for the proposed insured’s share of the loan amount. Unless uninsurable, all owners should be insured for the appropriate share of the loan amount.   
   
Buy-sell insurance

Buy-sell coverage can be considered for an amount equal to the proposed insured’s share of the business value of the company. Unless uninsurable, all owners with more than 10% ownership should be insured for their appropriate share. 

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Published: 01/09/2005
Last updated: 04/10/2013

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