To cancel a pre-authorized chequing (PAC) on life, long term care, critical illness insurance and accumulation annuity policies, please use the Request centre form Pac - cancel . If the client has multiple PAC arrangements, complete a separate request for each.
When cancelling a PAC, keep the following in mind:
- a minimum of 5 business days notice is needed to process a change by the next withdrawal date.
- the entire PAC arrangement can be cancelled, or one or several individual payments within a PAC arrangement can be cancelled.
- written authorization isn't required.
- for contractual premium plans, it's important that other arrangements to pay the premiums are in place. For example, if a client chooses to pay annually, you must tell us when they cancel the PAC arrangement. They may need to pay an adjustment amount to carry the policy until the next policy anniversary.
Who receives the PAC stop notice?
When a PAC is cancelled, a stop notice is mailed to the PAC payor if we have their address. If the PAC payor and policy owner are different, a stop notice will also be sent to the policy owner. The PAC stop notice will indicate a lapse date if applicable. The lapse date is only valid if no payment(s) is returned from the bank on and/or after the PAC stop notice date.
When is the PAC automatically cancelled on a permanent/term insurance policy?
PAC is automatically cancelled if:
- the PAC payor or policy owner request to cancel the PAC.
- 16 days have passed since the date a withdrawal was returned by the bank and a replacing payment, including any returned payment fees, have not been made.
- new banking information was not received.
- the contract is cancelled.
When is the PAC automatically cancelled on a universal life (ULife ) policy?
PAC is automatically cancelled on a ULife policy if the reserve/accumulation fund/policy fund is:
- negative and 16 days have passed since the date a withdrawal was returned by the bank and/or a replacing payment, including any returned payment fees, have not been made, or
- positive and there have been two consecutive returned withdrawals and no replacing payment, including any returned payment fees.
If there is a permanent/term policy on the same PAC arrangement as a ULife policy, the following guidelines apply:
If the reserve/accumulation fund/policy fund is positive
If a replacing payment, including any returned payment fees, is:
- made on the permanent/term policy within the 16 days but not on the ULife policy, the PAC arrangement will continue.
- made on the ULife policy but not on the permanent/term policy, the PAC arrangement will be cancelled.
- not made on either policy, the PAC arrangement will be cancelled.
If the reserve/accumulation fund/policy fund is negative
If a replacing payment, including any returned payment fees, is:
- made on the permanent/term policy within the 16 days but not on the ULife policy, then the entire PAC arrangement will be cancelled.
- made on the ULife but not on the permanent/term policy, the PAC arrangement will be cancelled.
- not made on either policy, the PAC arrangement will be cancelled.
