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How to Talk About Life Insurance with Your Family

Talking to your family about life insurance now helps to ensure the legacy you wish to leave them will be carried out in the future. It’s an important conversation that will enable you to support your loved ones financially, even after you’re gone.

As the baby boomer generation in Canada makes plans to distribute their wealth among their children, grandchildren, and other individuals and organizations they care about, it’s estimated that $1 trillion will be transferred to their heirs over the decade between 2016 and 2026. Life insurance is one option Canadians use to transfer this wealth, according to their wishes. Many policyholders, however, aren’t sure how to talk about their life insurance policy with their loved ones.

Providing information and instructions to your beneficiaries about your life insurance policy in advance will make it easier for them to understand your intentions and carry out your wishes for your estate and your legacy.

Key takeways

  • Your life insurance beneficiary or beneficiaries will need to access key information to make a claim against your life insurance policy and claim the death benefit.

  • Conversations about death and money are hard to navigate, but the benefits of addressing these topics are worth it.

  • Your loved ones may be uncomfortable with the topic and unfamiliar with insurance industry terms. It’s a good idea to come to these talks prepared with key information and explanations.

How to talk to your family about life insurance

Many people view their finances (including life insurance and estate information) as private subjects not to be discussed openly, even with loved ones. About four in 10 Canadians over the age of 55 say they’re not comfortable having open conversations with their families, but there are benefits to sharing your estate plans (including tax protection and maximizing the value of your loved ones’ inheritance).

Begin by keeping the conversation simple and straightforward. Maintain a focus on the topic at hand, sharing the necessary details such as which provider you’ve chosen for your policy and the name of your insurance and/or financial advisor.

Avoid getting “lost in the weeds” with information that could feel like too much. For example, it’s important for your beneficiaries to know that a life insurance policy payout isn’t taxed, but it isn’t as critical for them to understand the current dividend scale interest rate tied to the policy.

Here are some ways to start the conversation with your family:

  • Reference an article you’ve read about the importance of open communication in estate planning.

  • Kick off the conversation with a question. For example: “Do you have investment or savings goals in mind for the money I’ve set aside for you in my will?”

  • Start with an explanation of why it’s important to you to know your family will be taken care of in the future and then list the steps you’ve taken to ensure they are.

  • Reference current events (for example, the COVID-19 pandemic) and explain how they’ve motivated you to thoroughly organize your estate.

Enter this discussion with an abundance of patience and sensitivity, and prepare ahead of time, so you have the information (such as policy numbers) at your fingertips. Be ready not only to speak, but also to listen.

Talk about the beneficiary or beneficiaries of the life insurance policy

This may be the first conversation some of your loved ones have had about your estate planning and life insurance policies, and so you may need to explain some of the central terms and how they fit into the larger picture.

For example, what is a life insurance beneficiary or beneficiaries? In relation to life insurance, a beneficiary is the person (or people, organization, or charity ) chosen to receive the policy death benefit. People often choose to have more than one beneficiary, and there are a few different types of beneficiaries as well. A primary beneficiary is the first in line to receive the death benefit; however, you might also want to name a contingent or secondary beneficiary (especially if your primary beneficiary is just one person). In the event that your primary beneficiary passes away before you do, the death benefit will be paid out to the contingent beneficiary or beneficiaries.

Talking to your family about who your beneficiaries are (whether that’s your spouse/partner, your children and grandchildren, or a charity that’s meaningful to you) will help them to understand your plans, reasoning, and intentions for this part of your estate.

Having a conversation today will greatly reduce the possibility of unpleasant or confusing surprises in the future.

What happens to your life insurance policy after you die?

If you’ve named a life insurance beneficiary or beneficiaries and equipped them with the information they need, the process of making a claim on your life insurance policy should be straightforward when you pass away. Once the claim is made, the process of paying out the death benefit can begin.

To make a claim, your beneficiary will need:

  • Your policy number

  • A copy of your death certificate

  • A completed claim form

The time it takes for a life insurance policy death benefit to be paid out can vary. In Canada, beneficiaries can typically wait between 30 and 60 days, but under certain circumstances, payouts could take less or more time.

Advise your family on who is helping you with your estate

In addition to your insurance advisor (who can step in to assist your beneficiaries in making their claim), you may have other estate planning professionals helping to guide you. Their name, role, and contact details should be shared with your beneficiaries.

Other professionals to include are:

  • Your lawyer, who will know and understand the content of your will, including your estate plan and other legal details.

  • Your financial advisor, who may be able to support your beneficiary or beneficiaries in deciding where and how to invest the death benefit they receive.

  • Your accountant, who can inform your beneficiary or beneficiaries of the tax implications and cost of transferring your estate.

If you have any additional professionals who are currently working with you to help manage your estate, it’s wise to include their information as well.

Share a copy of your life insurance policy

Conversations about estate planning can be tricky to navigate. They involve a lot of emotion and a lot of information—the kind that may be unfamiliar to you and your loved ones. A reference document containing key contact information and instructions regarding your estate will be a valuable reference tool to leave for them. Your beneficiaries will also need a copy of your life insurance policy on hand when it’s time to make their claim, and it may also be helpful for your family to have a copy to review at their own pace, when they feel ready.

An RBC Insurance Advisor can help you protect your loved ones with the right life insurance coverage. Connect with us today to learn how.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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According to a recent survey by RBC Insurance, Canadians with employee benefits through a group insurance plan experience far greater financial health and mental well-being than those without.

“Knowing that you and your family are covered through your workplace benefits if an unforeseen event were to happen can greatly enhance feelings of overall well-being,” says Andrejka Massicotte, head of group benefits at RBC Insurance. “There’s an invaluable peace of mind that comes from knowing that you can access and benefit from health and wellness supports without having to worry about how to afford that care.”

Read on to learn why group insurance through your employer is a valuable benefit and how to maximize your coverage.

Key takeaways

  • “Group benefits” refers to insurance that’s provided to a group of people, typically by an employer to its employees.

  • Your employer may cover some or all of your premium, meaning you’ll likely pay less for this type of insurance than you would for an individual plan.

  • Group insurance may provide a variety of coverage: life insurance, disability insurance, extended health and dental benefits, accident insurance, virtual support, and more.

  • If your family has access to multiple group plans, you’ll also want to coordinate coverage with your spouse or common-law partner.

  • If your family has access to multiple group plans, you’ll also want to coordinate coverage with your spouse or common-law partner.

What are group benefits?

Also known as “employee benefits,” “workplace benefits,” or “group insurance,” “group benefits” are insurance and well-being offerings provided to groups of people, like a company’s employees. These plans may include life, accident, disability and critical-illness insurance as well as health products and services not included in provincial health care. These services can range from dental and eye care to prescription drugs, massages, and more.

Unlike individual insurance you might purchase on your own, group insurance benefits are provided by your employer, who may pay for some or all of their cost. Group benefits are often part of a total compensation package, which might also include things like RRSP matching, paid vacation and sick days, bonuses, and stock options.

Group insurance coverage typically has lower premiums than individual coverage. The eligibility criteria also tends to be less rigid.

How do group benefits work?

For you to enjoy the perks of group benefits, your employer will have to sponsor a plan from a provider like RBC Insurance. If your employer already has a group plan when you’re hired or introduces a new one during your employment, here’s what you can expect:

  • The choice to opt in or out: Some plans provide the same level of coverage to all employees, while others allow selection.You may be able to choose which benefits you want to opt into or what coverage level you require.

  • Premium-cost-sharing: Most of the time, your employer will pay part of your premium and you will pay the rest, with the amount being deducted from your paycheque. In some instances, the employer will pay the entire premium.

  • The chance to review coverage periodically: You may be able to review your coverage and make changes at various points in time (for example, every year or every two years). Note that premiums on group plans are subject to change.

What do group benefits cover?

Each group insurance plan is unique, so the benefits will depend on the employer and its insurance provider. Here are some typical elements of a group plan:

Life, accident, disability, and critical-illness insurance

Your group benefits package may include coverage for you and your family members in the case of unexpected illness, disability, dismemberment, or death.

  • Life insurance: In the event of your death, this type of insurance provides a lump sum “death benefit” to help your family cover funeral expenses, debts, living expenses, etc.

  • Accidental death and dismemberment (AD&D) insurance: Not a replacement for traditional life insurance, AD&D insurance provides coverage in the case of an accident (say, a workplace incident, traffic collision, drowning, or fall) that results in death or dismemberment.

  • Short-term and long-term disability insurance: If you become ill or injured and cannot work for a period of time, disability insurance provides a monthly payout equal to a portion of your regular income—generally between 60 and 85 per cent—provided you meet the plan requirements.

  • Critical-illness insurance: If you receive a life-altering diagnosis, such as cancer, stroke, heart attack, or dementia, this insurance provides a lump sum to help cover treatments, home or lifestyle alterations, and loss of income.

Health and dental

Your group health insurance can help supplement your provincial health coverage. Your group plan may offer coverage in the following areas:

  • Prescription drugs

  • Dental care

  • Eye exams and eyeglasses

  • Paramedical services, such as massage, physiotherapy, and nutrition coaching

  • Mental-health services

  • Out-of-province or out-of-country emergency medical care or travel expenses

  • Health-spending accounts (to cover eligible health and dental expenses not reimbursed by the plan)

  • Wellness-spending accounts (to cover things like a gym membership, sports equipment, supplements, and fitness trackers)

Some of these benefits may even extend to your eligible partner and/or dependent children.

Virtual services

Your physical and mental health are priorities, but in-person medical appointments, therapy sessions, and prescription pick-ups take valuable time. (Plus, appointments can sometimes be hard to get!) Your group benefits might offer some of these virtual services so you can take care of your health quickly and easily:

  • Employee-assistance program for accessing short-term counselling, among other services

  • Virtual mental-health and wellness programs

  • Virtual services to help with chronic-disease management

  • On-demand access to doctors and specialists who can diagnose health issues, write prescriptions, order diagnostic tests, and provide referrals

How do I make the most of my employee benefits?

There are a few ways you can make your employment benefits work at maximum capacity:

  • Understand your coverage needs: Your group plan may offer multiple types of coverage. Learn what each type includes, and choose the benefits that work best for you and/or your partner and children. Speak to your plan administrator if you have any questions.

  • Know your plan maximums: You don’t want to leave money on the table, but you also don’t want to overspend if you can avoid it. Make sure you know how much money you can claim in each area: dental, eye care, paramedical services, and more. Also be aware of whether—and how frequently—these limits reset.

  • Keep your reset date in mind: Know when your benefits reset! If it’s once a year on January 1, make sure you submit all your eligible expenses for the year by that date. Some benefits, like eyeglasses coverage, may reset every two years.

  • Coordinate coverage with your partner: If you have a spouse or common-law partner, you may be able to benefit from each other’s group insurance plans. If your insurance doesn’t cover certain areas, your partner’s plan may be able to top yours up and vice versa.

You’ll be able to make the most of your employment benefits by carefully considering all your options, familiarizing yourself with your coverage, and keeping an open line of communication with your plan administrator. You’ll also be more likely to reap the rewards of physical and financial well-being.

Visit Group Benefits – RBC Insurance to learn more about RBC Insurance Group Benefits Solutions.

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Your home is your private oasis. It’s a place that houses you and your family and stores all the precious belongings you’ve collected over the years. But life happens. Unexpected events can damage your home and its contents, from fires and storms to theft and vandalism. Thankfully, your home, condo, or tenant insurance includes coverage for your contents and protects some of your possessions, such as furniture, appliances, electronics, and clothing. However, this type of insurance has its limits. Read on to better understand what types of personal property insurance your policy provides, and when you might want to buy additional coverage.

Key takeaways

  • You’ll want to understand your personal home insurance policy to properly insure your personal belongings in Canada.

  • Most home insurance policies will protect some of your personal belongings in the event of theft or damage caused by specific unexpected events, such as a fire or vandalism.

  • Your coverage will have limits, and you may want to consider additional options available for big-ticket items, such as fine art, antiques, jewelry, or collectibles.

  • You may have the option to insure some high-value items separately that exceed policy limits.

  • You may be able to purchase additional coverage for certain events, such as earthquakes. However, some circumstances, such as coastal floods, aren’t covered, and there are usually no options to purchase coverage.

What personal property is covered by home insurance in the event of a claim?

Insurance for your home (whether you own a home or a condo, or are a tenant) will cover a pretty wide range of personal belongings, as listed below. Remember that you’ll likely have to pay a deductible out of pocket for each claim before your policy will compensate you for your loss. The standard deductible is $1,000 for the most common types of claims, but will vary.

Furniture and appliances

Your personal home insurance policy protects your essential furniture and appliances against fire, most thefts, and vandalism. Whether you need to repair or replace a sofa, dining room set, bed, or an appliance, such as a fridge, washer, or dryer, your policy will reimburse you within specified limits following a covered loss.

If you are a renter, your tenant policy will only provide coverage for the items you own. Any damaged items included in your rental or owned by your landlord would fall under the landlord’s insurance policy. Your landlord’s insurance does not provide coverage for your (the tenant’s) personal belongings.

Electronics and gadgets

Your home insurance policy covers items such as televisions, computers, laptops, smartphones, and audio systems that you have for personal use.

Clothing and jewelry

If your clothing and/or jewelry is stolen or damaged by a covered incident (such as a fire), your policy will provide compensation up to the specified limit if the amount exceeds your deductible. For example, through RBC Insurance, coverage is available for jewelry, watches, gems, and furs. Limits and extensions for coverage vary across Canada. If you own high-value jewelry or handbags, consider looking into extra endorsements or riders to protect your assets.

Some collectibles and art

Policies vary widely for collectibles and art, so check with your insurance provider to see what’s covered and what isn’t. For example, home insurance through RBC Insurance can specifically cover sports cards, sports memorabilia, manuscripts, and stamp and coin collections, and wine or spirits on your premises are protected.

Works of art, from paintings and sculptures to handmade rugs and antiques, might also be covered under your home insurance policy. Refer to your policy documents, as coverage limits can vary. The insurance company may require appraisals for some items or collections before approving the coverage to your policy.

Sometimes, a collection may be worth much more than the face value of its individual items. For example, you might have 10 baseball cards worth $30 each (for a total of $300), but sold all together, they might be worth $2,000. However, your policy might only compensate you for the purchase of 10 new $30 baseball cards, not the remaining $1,700 value of the collection. In this case, you’d want to consider “scheduling” the baseball cards for their value, which means individually listing them on your policy and then purchasing adequate coverage.

Renewable energy equipment

If your home features renewable energy equipment (think solar panels or a geothermal HVAC), it’s typically covered by home insurance. However, the equipment is only insurable by its owner.

Spoiled food

If a power outage spoils the food in your fridge and/or freezer, your home insurance may pay you to replace the items. You’ll have to check what types of power outages are covered by your policy, as well as what the reimbursement limits are, and if you’ll have to pay a deductible.

Door locks

If your house keys are lost or stolen, your home insurance will likely reimburse you for the cost of replacing your door locks up to your insured limit.

A child, parent, or dependent’s belongings

When insured through RBC Insurance, any personal property your dependent takes to school or brings to their dorm room or rental when attending boarding school, college, or university is covered up to a specified limit, as long as they haven’t moved out permanently. However, it’s a good idea for students to buy tenant protection coverage, sometimes called “renter’s insurance.”

If you have legal custody of someone, whether they’re a parent, sibling, or a child who is living with a physical or mental disability and lives in a nursing home or a care facility, their personal property is covered up to specified limits

Bicycles and e-bikes

In many cases, a damaged or stolen bicycle or e-bike will be covered up to a limit, even when your bicycle/e-bike is temporarily parked away from home. Through RBC Insurance, you may have coverage for each bike, tricycle, unicycle, or e-bike and its accessories and/or equipment.

Items stolen from your car

Personal property stolen from inside or on your car will typically be covered, even if the vehicle is not parked on your premises. Still, your coverage may be subject to monetary limits, a deductible, or other conditions. The car itself will not be covered by home insurance; it’s covered by your separate car insurance.

What personal property may not be covered by home insurance?

Basic home insurance won’t necessarily cover every item in your home or every type of damage. You may want to purchase specialized property insurance coverage in some instances listed below.

High-value items

Do you have fine art, antiques, jewelry, designer handbags, or collectibles worth a small fortune? Your home insurance policy has maximum coverage limits for these types of belongings, which may not be enough to cover their worth in case of damage or theft. Speak with an insurance advisor to see whether purchasing additional coverage will protect these items properly.

Home-based business equipment

A standard home insurance policy might not provide adequate coverage if you run a business from home and have extensive equipment or inventory. The insurance company may need to do a review to properly evaluate the risk involved before providing an insurance policy. For many small home-based businesses, a standard home policy only provides limited coverage, such as books, tools, and instruments, and only while on the property. Speak to an REC Insurance Advisor to determine if your home-based business assets are covered under a standard home insurance policy.

How can you ensure your personal property is covered sufficiently?

Take these four steps to protect your possessions:

  • Keep an inventory of your belongings and update it at least once a year. This inventory should be stored securely and include photos or videos of your possessions, as well as serial numbers and/or receipts (particularly for big-ticket items). A record will make the claims process easier.

  • Read and understand your home insurance policy’s coverage limits. An RBC Insurance Advisor will gladly help you if you’re uncertain about anything.

  • Know that you will be reimbursed differently by different policies: either with the actual cash value or the replacement cost. In the case of an eight-year-old refrigerator, depreciation would be considered as part of the cash value, and so you would only be reimbursed for the cost of a similar eight-year-old refrigerator. Replacement costs would cover you when you buy a new refrigerator of a similar kind and quality. It’s up to you to select the type of coverage that suits you best.

  • Consider buying separate endorsements or additional coverage, if your policy has limits or exclusions for items you own. It can help to ensure you’ll receive the item’s full value, not just the cost to replace it with something similar but less expensive.

Call an RBC Insurance Advisor today to learn more about home insurance, or to determine whether your personal property is sufficiently covered.

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Get a free online quote* for coverage to protect you, your property, and your belongings from the unexpected.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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What’s the difference between working from home and running a home-based business? When you work from home, you’re doing work for an employer, but without the commute to an office (in this case, your employer likely owns all of the items you use to do your job day to day, such as your laptop or company cellphone). In contrast, if you have a home-based business, you own your own company, and your primary office is located in your home (even if your business regularly requires you to be on-site at various locations, such as a client’s home or office). Or, you may have a side hustle, working to make a few extra bucks on top of your day job.

The need for separate, specific home-based business insurance that protects you and your company can range from “a good idea” to “absolutely necessary,” depending on the type of home-based business you operate.

Key takeaways

  • It’s important to know the difference between working from home and having a home-based business—especially regarding home-based business insurance.

  • The maximum annual income earned to be eligible for home-based business insurance is $150,000.

  • You may have a main employer, but also operate an unrelated side business, which may need to be insured separately.

  • Insurance for home-based businesses provides coverage that extends beyond typical home insurance or renter’s insurance policies.

  • Insurance for home-based businesses protects entrepreneurs from loss or damage to their business assets and certain liabilities.

  • It is important to notify your insurance company if you are operating a business from your insured home.

What is a home-based business, and how does it differ from working from home?

If you’re running a business or entrepreneurial venture out of your home, this qualifies as a home-based business—whether your “office” is a separate room or simply your dining room table. This means that businesses that range from companies selling handmade or second-hand items to small accounting or graphic design firms are all considered home-based businesses.

Working from home (or working remotely) is different in that you have an employer. You’re not working for yourself, but for a company that’s based outside of your home and that allows you to work remotely, away from its offices. You may be working in another office or while travelling (it doesn’t necessarily take place at home).

Does my home insurance cover my home-based business?

Your home insurance policy will typically provide you with coverage for the home itself and for your personal property. And it will offer liability coverage for accidents that might occur on your property. Like all insurance policies, however, home insurance has limitations and exclusions which might not extend to your home-based business activities and items, such as the equipment you use or the inventory you keep on the premises. 

It’s a smart idea to double-check your current home insurance policy and then evaluate it to see if you need additional insurance products, in order to avoid leaving your business uninsured or underinsured.

Some options to consider are:

Add-on endorsements: If you already have homeowner’s, condo, or rental insurance, you can choose to add a home-based business endorsement to your current policy. These endorsements may provide some coverage for small business owners for their equipment, inventory, and liability related to entrepreneurial activities. However, it’s important to review the coverage and determine if these add-on endorsements are a good fit for you. Contact an insurance advisor if you have any questions about your policy.

Professional liability insurance: Does your home-based business offer professional services, consultations, or advice? If so, professional liability insurance (also called “errors and omissions insurance”) can protect you from claims of errors or negligence made by your clients. If a client were to file a lawsuit against you, this type of insurance might cover (in whole or in part) your legal fees.

Cyber endorsement: In today’s digital age, your home-based business likely relies on technology such as computers, cloud services, smartphones, and smart home devices. While these tools offer convenience, they also store personal information online, creating potential access points for cyberattacks that can cause financial, personal, or emotional harm. Eligibility for personal cyber coverage for home-based businesses requires specific conditions to be met. Speak with an insurance advisor to learn more.

Home-based business extension: Available through RBC Insurance, this endorsement is designed to fit the needs of entrepreneurs who operate small businesses from their primary residence. Adding this product to your home, condo, or tenant policy will cover you for property damage and personal liability, and your business contents. Many types of entrepreneurs and home-based businesses are eligible for this endorsement. Coverage is subject to the terms and conditions within specified limits outlined in the policy. An insurance advisor can help you determine if this is the right addition to your policy.

Business Insurance: Home-based business owners who feel the above-mentioned endorsements and insurances still don’t provide adequate coverage can consider business insurance. This is usually a customized business insurance package that may include employer’s liability insurance, business tools and equipment insurance, commercial auto insurance, and more. Consider discussing your unique situation with an insurance advisor. They’ll help you find the best solution.

Why protect your home-based business with a home business extension?

Discovering that your basic home insurance policy doesn’t cover you, your home, or your business when you really need it is a terrible feeling. Many typical home insurance policies do not cover damage due to business activities deemed “risky” (for example, a home business that prints T-shirts using a heat press). Planning ahead by opting for an add-on home-based business extension may protect you in instances of:

  • Third-party bodily injury (to clients, delivery people, or employees), also known as “personal liability”

  • Property damage

  • Inventory loss

  • Theft or damage to office/business equipment (such as computers or office furniture)

  • Loss of income due to a pause in operations stemming from an insurable event, such as a fire

What businesses qualify for home-based business insurance coverage?

Qualifying for home-based business insurance is simple and straightforward. Your insurance advisor will ask you: 

  • About your business’s annual gross sales

  • If the home occupied by the insured is a principal residence

  • If the business operates solely out of the home and at no other location

  • If employees and/or customers frequently visit the home

  • About the nature of the activities being performed in the home while running your home-based business

This list isn’t inclusive, but it does include some of the basic requirements for home-based business insurance coverage. For example, some insurance providers won’t insure home-based businesses dealing in products or services sold outside of Canada, and some providers can restrict in-home daycare or babysitting services. Alternatively, your home-based business may be too large (based on income, number of employees, or cross-border reach) to qualify for this type of insurance. Your insurance advisor can assist you in reviewing all the requirements and making the best choice.

FAQs: Insurance for home businesses

Does home insurance cover my home-based business?

Home and renter’s insurance policies don’t typically cover a home-based business. Entrepreneurs who work out of their home often need to obtain extra coverage, so their business, inventory, and office equipment and/or tools are covered against loss or damage.

Do I need extra insurance to run a business from my home?

Yes. A home-based business policy or an add-on endorsement is usually required to make sure  you are adequately covered in case of theft, damage, or liability claims, and it may be a requirement of the insurance company to insure your property.

Is my work laptop covered by home insurance?

If you work from home and use your employer’s laptop, it will typically be covered by your company’s commercial policy. If, however, you run a home-based business, your computer may be insured under your standard home insurance policy.

Do I need additional insurance when I work from home?

For the work-from-home (WFH) set, additional insurance (beyond your own home or renter’s insurance) isn’t usually required. Talk to your employer about its WFH policy and its own commercial insurance policy’s coverage for remote workers to be sure you’re covered working from home. Talk to your own insurance advisor if you still have questions.

Call an RBC Insurance Advisor to check if you qualify for home-based business insurance and to find the best solution for you.

Great Rates and Expert Advice on Home Insurance

Get a free online quote* for coverage to protect you, your property, and your belongings from the unexpected.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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Whether you’re putting in new light fixtures or building the swimming pool of your dreams, it’s important to ensure your home insurance policy protects your investment. Read on to find out what you need to know about home insurance during your renovations.

Key takeaways

  • Many Canadians assume their home insurance stays the same during renovations, but this varies greatly depending on the type and scope of the renovation. It’s important to review your existing policy before starting any work on your home.

  • The details of your planned renovation can increase your home insurance rates.

  • Additional coverage for the duration of your home renovation is available, so you’re protected in case of personal injuries, lawsuits, or lost and/or damaged materials.

  • Speak to your home insurance provider about your plans before you start your renovations, so they can provide you with your coverage options.

  • Confirm your contractors are adequately insured before they start their work.

Six ways to ensure you and your home are protected during a renovation

1. Review your home insurance policy before starting your reno

Homeowner’s insurance typically protects your home and personal belongings against events such as fire, wind, and theft. But many insurance policies don’t offer protection during a home renovation. In the unfortunate event your kitchen reno causes a burst pipe that leads to water damage in your basement, for example, your insurance claim could be denied.

Make sure you look closely at your current coverage and limitations to avoid any unpleasant surprises. Consider factors such as deductibles and exclusions, and reach out to your insurance advisor at any time if you have any questions. It’s important to understand the breadth of your home renovation insurance coverage.

If you’re considering a major renovation, such as a first-floor addition or extension, removing a load-bearing wall, or opening an exterior wall, talk to your insurance advisor about a product that protects you against the risks associated with these types of major projects. RBC Insurance’s Major Renovation Endorsement, for example, protects not only your investment in your renovations, but also your entire home. Without it, uninsured work can impact the coverage of your existing home policy, leaving you vulnerable to significant risks and losses.

2. Notify your insurance provider about any upcoming renos

It’s essential—and with many policies, you’re actually contractually obligated—to keep your insurance provider in the loop. Before you start renovating, let them know the scope of work, the estimated timeline, and any significant changes you’ll be making to your home. Here are some things to keep in mind.

  • Cost to rebuild your home: Insurance rates depend on various factors, including the cost to rebuild your home exactly as it once was (this is called “replacement cost”). If you remodel and improve a part of your dwelling, it’ll probably raise your home’s value and, therefore, the cost to rebuild your home. These increased costs can be reflected in increased insurance rates.

  • Risk of extensive alterations: Significant renovations—such as converting a basement into a one-bedroom apartment—can increase the risk of damage to your home during construction. Your insurance costs may increase during the renovation period, then return to normal after the project is completed.

  • Risk of unoccupied homes: Renovations that require you to move out during the project will likely cause your insurance rates to increase. Empty homes carry more risk, because something could go wrong when no one is around to take action.

  • Benefit of protective systems: Putting loss-prevention systems in place, such as reinforced roofing, storm shutters, and burglar alarms, can reduce your home insurance rates. So can upgrading electrical, heating, and plumbing systems.

Your insurance company can help you figure out how to adjust your policy for adequate coverage during the renovation or let you know if you qualify for any discounts. You don’t want to be underinsured in a worst-case scenario, such as a flooded home or a house fire.

3. Get adequate coverage for renovation materials

There’s always a risk that the building materials and supplies in your home can be stolen or damaged during a renovation, so it’s a good idea to make sure your insurance policy covers these materials and supplies.

Building materials and supplies aren’t cheap, and the last thing you want is to pay twice for them. Extra insurance protection can keep your budget on track and lower the stress of unexpected incidents.

4. Understand what liability coverage is

Renovation sites can be dangerous with obstacles such as tools, raw materials, and cables, and surfaces can be uneven, unstable, or slippery. For these reasons, workers, visitors, and even passersby can slip or trip and fall, causing serious injuries.

It’s important to have enough liability coverage to help protect yourself against any possible lawsuits from accidental injuries that may occur during your home renovation. This coverage may pay for personal injury and can help cover your legal defence if you’re sued.

RBC Insurance’s Major Renovation Endorsement includes liability coverage (along with coverage for many other things). Speak to your insurance provider well before you start your renovation, so you know exactly what’s included in your policy.

5. Get your contractor’s proof of insurance

If you’re hiring contractors or subcontractors to work on your home renovation, ask to see their certificate of insurance. Contractors should have provincial worker’s compensation insurance to protect their workers if they get injured on the job. They should also have general liability insurance in case they make mistakes and/or cause damage to your home.

If a contractor accidentally burns down a part of your home, for example, their insurance will likely cover the fix—if they have proper coverage.

But the costs of injury and/or damage could fall to you if your contractor isn’t appropriately insured. It’s best to review your contractor’s coverage with your insurer to ensure there are no gaps. Consider hiring someone else if their coverage isn’t sufficient.

6. Keep records and receipts from renovation expenses

A paper trail can be your best friend in any home renovation. Safely store important documents such as contracts, invoices, and photographs, and record project dates. This documentation will come in handy if you have a dispute with your contractor(s) and need to file an insurance claim. 

Your home is one of your most prized possessions. It’s better to be safe than sorry when it comes to protecting any investment you make in it.

Speak to one of our RBC Insurance Advisors to ensure your home renovation is adequately covered and protected against unexpected risks and losses.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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Driving gives you the freedom to explore a variety of new locales at your own pace, or it can simply get you from point A to point B. If you’re renting a car, there are a few things to think about beyond the make and model before you drive off the rental lot. Choosing the right car rental insurance can ensure that you’re adequately protected if there’s an accident and injuries or the car is damaged or stolen. Plus, you’ll want to avoid paying for things you don’t need.

How do you choose the right level of auto rental insurance coverage? There are several factors to consider so you can enjoy a worry-free journey.

Key takeaways

  • Options for rental car insurance include your current personal car insurance, credit card provider coverage, and insurance provided by the rental company.

  • The right level of coverage can help protect you in the case of an accident, injuries, theft, or damage to the car.

  • Types of coverage you should be familiar with include collision damage, liability coverage, personal accident insurance, and personal effects coverage.

  • Your insurance premium may vary if you add an additional driver, leave the country, or purchase additional rental company insurance, so carefully review the terms and conditions.

Car rental insurance options to consider

Your current personal car insurance

Depending on the policy, your current personal car insurance may provide adequate coverage for renting a car. It’s important to understand what coverage you have (or don’t have!) on your existing policy.

If you’re road-tripping between Canada and the United States, check with your personal car insurance company about cross-border travel, as you might need to pay some additional fees or it might not cover it at all. It is important to note that coverage on a personal policy for a rental car, whether for pleasure or business use, is available only if you purchase Legal Liability for Damage to Non-Owned Automobiles. Note that this endorsement is only valid in Canada and the United States. It won’t apply if you plan to drive internationally.

Credit card rental car insurance

Many credit cards provide car rental insurance coverage, which can be a great way to save money as you can avoid purchasing additional insurance. But before you rely on your card alone, you’ll need to review the terms and conditions, as coverage can vary widely. You’ll likely need to pay for the entire rental using your credit card to be eligible for the coverage. You also might need to decline additional coverage from the rental company.

Rental car insurance provided by the rental company

Rental car companies offer many different types of coverage. But do you really need the extra insurance? Here are the types to consider:

Collision damage waiver (CDW), or loss damage waiver or physical damage waiver

This usually covers damage to the rental car if there’s an accident, theft, or vandalism. But it might not cover all types of damage—for example, damage to the windshield, mirrors, or tires—and there’s usually a deductible (the amount you’re responsible for paying), so always have a thorough read of the policy.

Liability insurance

Liability insurance is critical, so the legal minimum is often included with your rental car. It can protect you if you injure someone or cause damage to another person’s property or car while driving the rental car. You might need to purchase more than the minimum required by your province or territory. If you’re driving in the United States, where insurance payouts are typically higher, you may want to consider a higher limit.

Personal accident insurance (PAI) and personal effects coverage (PEC)

The last thing you want to worry about while road-tripping is how you would cover medical expenses if there were an accident. That’s where PAI comes in. It can provide

coverage for medical and rehabilitation costs as well as other expenses, like lost income.

If you purchase PEC, you’ll have coverage for any personal belongings that might be stolen from the rental car.

If you know which company you are renting from, contact it in advance to see if you can get a copy of its insurance document to review options and limits and identify gaps or overlaps with your existing coverage.

What to do before renting a car

Before hitting the road in your rental, there are a couple of steps you should take to make sure you have the right coverage:

  1. Call your current personal car insurance provider: Speak with your insurance company to learn whether your current policy covers car rentals, what type of coverage is available under your current policy, and whether any additional coverage is required based on your rental needs and where you will be travelling to.

  2. Understand the coverage available through your credit card or rental company: If your situation requires you to use car insurance provided through your credit card or the rental car company, be sure to check your credit card certificate of insurance and contact the rental company to understand the terms and conditions for both options.

The more you understand in advance of your travels, the more you can relax knowing that you’re covered in any scenario. Connect with an RBC Insurance Advisor to learn more about personal car insurance and coverage while renting a car by calling 1-877-749-7224 or get a quote online today.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Choosing life insurance beneficiaries is more than just a step in financial planning — it’s shaping your legacy. Read on for help with navigating the choices, whether it’s for family, friends, trusts, or charities. Dive in to how to split your legacy among multiple beneficiaries, understand the roles of primary and contingent beneficiaries, and know the difference between revocable and irrevocable options. You’ll also learn why naming a beneficiary is so important, and what could happen if you don’t.

Take on your legacy planning with confidence, whether you’re just starting out or you’re updating your estate plan.

Key takeaways

  • A life insurance beneficiary is a person and/or entity named to receive benefits after the policyholder’s death.

  • Options for beneficiaries on life insurance are broad, including individuals, trusts, charities, and businesses.

  • Understanding the difference between primary, contingent, revocable, and irrevocable beneficiaries is crucial.

  • Proper beneficiary designation ensures efficient asset transfer, tax benefits, and the avoidance of probate.

What is a life insurance beneficiary?

A life insurance beneficiary is the individual and/or organization you designate to receive the payout from your life insurance policy after you pass away. It’s a key component in your broader estate planning, ensuring the fruits of your hard work and savings are passed on in a way that reflects your personal wishes and priorities.

When you choose a beneficiary on your life insurance, you’re essentially deciding who will benefit from the financial safety net you’ve put in place. This can be a family member, a close friend, a trust, or even a charitable organization whose cause you support. The beneficiary you choose is a reflection of your relationships, commitments, and values. It’s about ensuring that, in your absence, your financial legacy is entrusted to the right hands, whether that’s providing for your family’s future, supporting a friend’s well-being, or contributing to a cause close to your heart.

Who can be a beneficiary on life insurance?

Choosing a life insurance beneficiary is a flexible decision. A beneficiary can be:

Family members

Commonly chosen, they can include your spouse, children, siblings, or other relatives.

Friends

Suitable for those with whom you have a close bond, or who may depend on you financially.

Trusts for minors

Ideal for managing assets for minors until they reach legal adulthood.

Charities

A way to leave a philanthropic legacy.

Businesses

Useful for business owners for succession planning or ongoing business support.

Can you have more than one life insurance beneficiary?

Absolutely! You can designate multiple beneficiaries of your life insurance policy. This allows you to spread the benefits across several people and/or organizations, ensuring that each receives a portion of the payout. You have the flexibility to specify exactly how much of the policy proceeds each beneficiary should receive, tailoring the distribution to match your wishes and their needs.

What are the different types of life insurance beneficiaries?

Life insurance policies typically have two types of beneficiaries: primary and contingent.

Primary beneficiary

This is the first person, people, or entity designated to receive your death benefit. They are typically those you want to primarily protect or support in the event of your death.

Contingent beneficiary

The designated contingent beneficiary receives the death benefit in the event the primary beneficiary can’t, often due to the primary beneficiary’s death before or at the same time as the policyholder’s, or if the primary beneficiary cannot be located, or refuses the death benefit.

The main difference between the two is their order of priority. The primary beneficiary is the initial recipient, while the contingent beneficiary is an alternate, ensuring your wishes are respected even if the primary beneficiary is unable to receive the benefits.

A contingent beneficiary is sometimes referred to as a “secondary beneficiary.”

What’s the difference between a revocable and an irrevocable beneficiary?

You’ll encounter another important decision when you set up a life insurance policy: choosing between a revocable and an irrevocable beneficiary.

Revocable beneficiary

This option offers flexibility, allowing you to change your beneficiary without their knowledge or consent. It’s most commonly used if you anticipate changes in your relationships or circumstances.

Irrevocable beneficiary

Once chosen, this beneficiary cannot be changed without their agreement (you also can’t make other changes to your policy, such as withdraw money or take out a policy loan without their consent). It’s a more permanent decision, providing guaranteed financial protection for the beneficiary. This is commonly used in marital breakdowns, blended families, and business situations.

If a minor is being considered as an irrevocable beneficiary, it should be noted that neither the minor nor their parent/guardian or even the trustee are able to provide consent to a change of beneficiary. It is usually not possible for the beneficiary designation to be changed if a minor has been designated as an irrevocable beneficiary.

Note for residents of Quebec: In Quebec, a spouse named as a beneficiary is automatically considered irrevocable, unless otherwise stated or in the case of divorce, adding a unique consideration for policyholders in this province.

Why name a life insurance beneficiary?

Choosing a beneficiary on life insurance is essential for several practical reasons.

Direct allocation

The money from your life insurance policy goes directly to the people and/or organizations you’ve chosen, exactly as you planned. This happens outside of your estate, without the time and costs associated with probate. (Probate is the legal process of the courts formally accepting a will.)

Faster access to money

Your beneficiaries usually get the money more quickly, since it doesn’t get tied up in the settling of your estate.

Avoiding legal hassles and costs

Skipping the long and often expensive legal process of probate means potentially saving on fees and time.

Keeping things private

Your financial details stay out of the public eye by not going through probate.

Making life easier for beneficiaries

The whole process becomes simpler for those receiving the money, helping them during a difficult time without added stress.

What happens if there is no beneficiary on a life insurance policy?

In the absence of a named beneficiary on a life insurance policy, the death benefit becomes part of the deceased person’s estate. This shift means the payout is subject to the probate process. Probate is the legal process to prove and gain court approval that the will is the last will and testament of the deceased individual.

Probate can be a lengthy and public process, potentially involving legal fees, if the estate is greater than $50,000, and delays in distributing the assets. Without a designated beneficiary, the streamlined transfer of life insurance benefits is lost, and the proceeds become entangled in the broader estate settlement process.

And because of estate administrative tax, your leftover assets may be much less than if you had named a beneficiary.

How to choose a life insurance beneficiary

Selecting a life insurance beneficiary is a deeply personal and significant choice, reflecting your relationships and your priorities. Consider the following when deciding who should be listed as your beneficiary or beneficiaries.

Financial dependence

Is there anyone who relies on you financially? This could be a spouse, children, aging parents, a friend, or anyone else who depends on your income.

Family considerations

If you’re married, have children or grandchildren, think about how the benefits can support their future.

Charitable intentions

You might want to leave a legacy through charities, organizations, or academic institutions that are important to you.

Business relationships

If you have a business partner, consider how your absence might impact your business and whether they should be a beneficiary.

Remember: There are no set rules for naming a life insurance beneficiary. It’s entirely your decision who receives the payout from your life insurance policy. Your choice should align with your personal circumstances, future goals, and the legacy you wish to leave.

Speak with an Insurance Advisor today to help you navigate these choices with confidence and clarity. They can offer expert guidance on life insurance options and help tailor a plan that fits your unique needs and goals. Don’t hesitate to reach out and start the conversation about how you can effectively pass on your legacy to your loved ones and/or other priorities in your life.

*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.