When you're disabled, do your student loan repayments and business expenses stop?
Cover your student loans or business expenses while you recover from a disability
You probably have to continue repaying your student loans while you're disabled. You could have ongoing expenses such as rent and salaries that continue if you operate a business. Instead of dipping into your savings to pay the bills, use Business Overhead Insurance instead — and get more peace of mind. Through the RBC Student Savings Program, you get a healthy discount.
Your RBC Business Overhead Expense insurance is guaranteed until age 65. As long as you pay your level premiums on time, RBC can't change the plan, increase your premiums or cancel your coverage.
Coverage is conditionally renewable after age 65 if you're working and responsible for the expenses of a business — but the benefit period and premiums are not guaranteed. After age 75, benefits are reduced by 50%.
Business overhead insurance does not usually pay out to cover student loans. RBC only offers this option through the SSP.
- If you're totally disabled and are a student not responsible for business expenses: you get 25% of the monthly benefit you purchased to help cover student loan repayments, up to $500 per month ($2000 of base coverage purchased). You can purchase more than $2000 of base coverage, but the student benefit will not increase beyond $500.
- If you're totally disabled and are responsible for business expenses: get a minimum of $450 per month to help cover regular business expenses (up to a maximum you selected).
- If you're partially disabled, you get up to 50% of the maximum payout for up to three months.
- If expenses in a given month don't warrant a maximum monthly payout, the unclaimed portion can be carried forward for use in a month where expenses exceed the maximum payment.
- Once you become responsible for business expenses, the ability to receive the student loan benefit is lost
- The lifetime maximum you can purchase without medical underwriting is $6,000.
- Financial underwriting is waived if the purchased maximum is less than a stipulated threshold determined by area of study (see below).
- Discount: you qualify for up to 25% off depending on your field of study (see below).
- Waiting period: choose 15, 30, 60 or 90 days
- Benefit period: 15 or 24 months
- If you are totally disabled for the entire benefit period and you haven't received benefits up to the lifetime maximum, benefits will be extended until that maximum has been paid out.
- Premiums waived during disability: After 90 days of disability, your premiums are waived while you remain disabled. You also receive a refund of premiums paid during those 90 days.
Disability definitions are similar to those in RBC disability insurance. If you're receiving disability benefits, you generally qualify to receive business overhead expense benefits too.
Waived Financial Underwriting Limits and Discount by Area of Study
Note: More than these limits can be applied for, but you will need to provide proof of income and undergo financial underwriting if you apply for a larger amount. You will also need to go through medical underwriting if you apply for more than $6,000 of monthly benefit of Personal DI or Student BoE.
Reminder: this content is simplified for clarity. Also, products change. Please refer to the policy contract for specifics.