PAC and personal cheque returned payment fees

This document explains when we charge a returned payment fee for the payor's returned withdrawals due to non sufficient funds (NSF) on pre-authorized chequing (PAC) arrangements and personal cheques. It also explains how the clients can pay the NSF fees on life, long term care, critical illness insurance and accumulation annuity policies.

The charge is a $25 returned payment fee to the client for each return

  • in addition to any fees charged by the client's bank, and
  • only one fee per PAC arrangement is charged even though there may be many policies on the PAC arrangement.

When the payor's payment is returned NSF, we send the payor (if we have their address) and the policy owner a 'PAC returned notice' asking them to pay:

  • the returned payment fee, and
  • the outstanding premiums.

What if the payor is not at fault?

If the error is made by the payor's bank or Sun Life Financial, we'll investigate the returned payment fee and may waive it. We handle these situations on a case-by-case basis.

Can the fee be charged if it wasn't part of the policy when sold to the client?

Sun Life Financial is not prevented from charging a returned payment fee for returned PAC withdrawals or cheques not honoured by the bank.

How are the payor and the policy owner notified about this fee?

1. Returned payment fees are explained on the:

  • PAC set-up notice
  • PAC change notice, and
  • policy owner statement (policy owner only)

2. The payor and policy owner are notified a returned payment fee will be charged on the:

  • PAC returned notice, and
  • PAC stop notice.

When is there not a fee?

  • the first PAC withdrawal, or
  • a personal cheque for a new policy

Note: This applies for new policies set up on a new PAC or added to an existing PAC. This is a one time occurrence only.

A fee is not charged on PAC arrangements set up for the following payment types:

  • accumulation annuities
  • NWPF - Non Withdrawable Premium Fund
  • WPF - Withdrawable Premium Fund
  • UPPI - Unpaid Premiums Plus Interest
  • loan

How does the payor pay this fee and outstanding premiums?

The payor can choose one of the following options:
1. Special withdrawal

  • It is important to have the payor give you authorization for a special withdrawal.
    • this authorization can be verbal or written
    • please do not contact us requesting a special withdrawal without the payor's consent
  • Five business days are required to process the withdrawal on the date requested.

2. Cheque

The payor's cheque should be payable to Sun Life Assurance Company of Canada and should indicate it is also paying the returned payment fee. They can use the return envelope included with their notice.

Note: If a returned payment fee is being paid at the same time as the outstanding premiums, it must be paid in the same manner as the outstanding premiums.