Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for no medical
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for universal life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for decreasing term coverage
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life insurance for the self-employed
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Blue Cross is a great option if you want both life and disability insurance under one policy: their tangible hybrid plan. Health insurance is their specialty, though; not life insurance.
Pros and Cons
Pros
Get up to $1M in coverage, plus the plan converts to a permanent one at age 56.
Option to add riders like health, dental and disability to your life insurance policy.
Cons
The only term lengths available are 10, 20 or 25 years.
Whole life insurance coverage only available up to $500,000 for ages 18 to 70.
No standalone critical illness insurance, it must be added as a rider to your life insurance policy.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for cancer survivors
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for credit union members
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
With preferred rates for eligible Canadians, CUMIS life insurance could be a good choice if you're a credit union member, but there are better options otherwise.
Pros and Cons
Pros
Variety of add-ons and riders available (for an extra fee).
Large variety of policy types from term, to whole, to universal, and children's coverage.
Cons
Only available through credit unions and cooperatives.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for participating life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for seniors and no medical life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Top pick for seniors, especially for those with health issues that would get them declined or charged sky-high rates elsewhere. Most plans let you skip medical exam.
Pros and Cons
Pros
No health exam for simplified issue & guaranteed acceptance plans.
Known for fast processing times, some get approved within 24 hours.
Established player in the no medical life insurance space.
Cons
More expensive than traditional term life insurance.
Some plans are deferred by 2 years, meaning no death benefit if you pass before then.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for short-term life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for whole life insurance for children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Desjardins offers one of the most affordable whole life policies for kids. Unique offering of 5 Pay which is the ability to pay the policy in full within 5 years.
Pros and Cons
Pros
Number of riders like children’s accidental fracture and guaranteed insurability.
Strong brick-and-mortar presence in Ontario and Quebec.
Cash value options available, with a dividend scale of 6.2%.
Cons
Presence outside of Ontario and Quebec is limited.
Children’s Life Protection policy can be converted to permanent, but coverage only goes to $20K.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life insurance for smokers
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for wealth transfer to children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner up for life insurance for children
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best life/disability insurance for the hard-to-insure
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Humania's Insurance Without Medical Exam asks only 6 questions and is issued immediately. Get disability & critical illness insurance with no extra questions.
Pros and Cons
Pros
Insurance Without Medical exam includes life, critical illness, and disability insurance.
Get $5K-$300K in coverage.
Cons
Will not pay out death benefit for a pre-existing condition for 1-2 years (depends on the policy)
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for business owners life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for permanent life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for parents & homeowners
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for best term life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for existing customers
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for whole life insurance with cash value
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Policies are pricier, but Sun Life has the highest dividend scale for whole life insurance in Canada. Good option for high-net-worth individuals and has perks like succession planning.
Pros and Cons
Pros
Very experienced advisors, some with 30+ years of experience.
Range of options for cash value life insurance.
Single & joint policies available.
Cons
Premiums are higher than competitors
Funds are expensive and investment options limited to their available funds.
Check their MERs (management fees) against other companies.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Best for simplified & guaranteed issue life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Known for its variety of no medical, simplified issue and guaranteed accepted life insurance products. But make sure to compare premiums with other no medical providers.
Pros and Cons
Pros
Multi-contract discount, refunds up to $100 if a referral buys UV within 1 year.
No health exam needed for up to $500,000 in term & $150,000 in permanent coverage.
Cons
Only available in Quebec, Ontario and New Brunswick
Prices for their simplified whole life policies look higher than CPP and Beneva.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Second runner-up for best term life
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Rated between 1-5 stars for cost, trustworthiness, policy options, customer reviews, and financial stability. Pulling from sources including but not limited to AM Best, Better Business Bureau, Fitch Ratings, InsurEye, TrustPilot, Google Reviews, etc.
Runner-up for smokers life insurance
Cost
Based on monthly premiums, pulling from publicly available rates. $ - most affordable rates $$ - average rates $$$ - most expensive rates
Rated between $, $$, $$$ in relation to comparable life insurance products on the market in Canada. Based on publicly available rates pulled from WinQuote and other external sources.
Laura McKay is the co-founder and COO of PolicyMe, Canada's fastest-growing digital life insurance company. In 2021, she was named one of the Women of the Year by Bay Street Bull. Laura has a Bachelor of Mathematics from the University of Waterloo. Her degree focused on Actuarial Science, which included learning about mortality risk, the basis of life insurance pricing and valuation. After her degree, she was employed by Manulife and Munich Re in Actuarial Science. Laura then worked at famed management consulting company Oliver Wyman in New York from 2013-2018. In this position, she worked with many Fortune 500 life insurance companies and helped them develop growth strategies and solve operational problems and regulatory issues.
August 3, 2023
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6 minutes
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PolicyMe content follows strict guidelines for editorial accuracy and integrity. Learn more about our editorial guidelines.
It's unlikely that your life insurance claim won't pay out because death is hard to fake. But the claim may be denied if you lie on your life insurance application.
The payout may also be denied if you pass while doing something that goes against your policy's exclusion clauses, like auto racing.
The life insurance provider needs to give a specific reason to deny the claim. You can contest directly with the provider or through a lawyer if needed.
Life insurance payout in Canada: what is it?
The life insurance payout (or "death benefit") is a tax-free lump sum paid to your beneficiaries if you pass while your life insurance policy in Canada is active.
Your beneficiaries can use these funds however they see fit, including:
Paying for final expenses
Paying off a mortgage or other debts
Providing for your kids (ie. childcare costs or post-secondary education)
Day-to-day expenses to maintain your family's standard of living
Reasons life insurance won't pay out in Canada
First off, it’s rare in Canada for an insurance provider to not pay out a life insurance claim. Canadian Premier, for example, has paid 99% of Term Life claims.
Most of the reasons a payout could be declined are easily avoidable, like providing inaccurate information on your application.
Below, we'll get into the details on what disqualifies a life insurance payout. More of a conversationalist? Get genuine life insurance pointers by booking a chat with a non-commissioned advisor:
1. Inaccurate information on your application
It is considered intentional misrepresentation if you withhold information or lie to get a more affordable premium during your application process. If you claim not to be a smoker, for example, but the life insurance medical exam during your application reveals years of smoking, that's misrepresentation.
There are a few outcomes if it's revealed you intentionally lied. The best-case scenario is paying higher life insurance rates if this misrepresentation is revealed before you're approved.
You need to make payments on life insurance to keep it active or your policy may lapse. So if something happens to you and you have missed payments, the insurer can deny your claim.
Policies often lapse because premiums are too expensive for the policyholder to keep up with. This is especially true for permanent life insurance policies, which can cost up to seven and a half times more than a similar term policy.
3. Policyholder passes away during contestability period
A contestability period is a set timeframe. This is usually one to two years after your policy is put into place. If you pass during your policy's contestability period, the insurance company might reevaluate your policy.
This ensures you don't misrepresent yourself during the application process and protects the insurance companies from fraud.
Paying higher rates for senior's life insurance may be an ideal investment to avoid having any issues arise during the contestability period.
4. Death by suicide in the first two years
This is the norm for life insurance policies in Canada, including with PolicyMe. If you die by suicide within the first two years of your policy being in place, most policies won't pay out your death benefit.
A life insurance policy does cover death by suicide if it happens after you have held the policy for over two years.
Other types of clauses that you might find in your life insurance policy are:
5. Beneficiaries aren't aware the policy exists
Sometimes beneficiaries don't know their loved ones have a life insurance policy. And when that happens, the person you named your beneficiary won't claim that benefit. You would be surprised how often this happens.
We always recommend being transparent with your loved ones if you name them your beneficiary. It saves them the hassle and ensures they're financially protected as you intended!
If a loved one forgets to let you know you're the beneficiary, you can also search for a lost policy using OLHI search tool.
6. You didn't update your beneficiaries or name a secondary beneficiary
If you have forgotten to name your beneficiaries, the insurance won't always be passed down to your family. Instead, it will be used to pay for your estate first.
If any remaining insurance money is left, the rest will go to your family; usually, it's not much.
To avoid this, it's a best practice to name primary and secondary beneficiaries. That way, you can be sure the money you're taking out to protect your loved ones does just that.
7. Cause of death is excluded in your policy
Read your policy carefully to see what other exclusions may be in your agreement. These might include:
Should you be worried your life insurance claim won't get paid out?
Short answer, no. If you're honest on your application and pay your premiums, you'll face no real issues when it comes time to make a claim.
There are two main worries that people tend to have about the payout; that the claim will be denied or that the insurance company will go under and be unable to payout.
Both of these scenarios are unlikely. Here's why:
There are also organizations like Assuris, a Canadian non-profit that protects Canadian life insurance providers if their company fails.
Should you worry that your life insurance claim won't be paid out with PolicyMe?
Our policies are issued by Canadian Premier Life Insurance Company. They have been operating for more than 60 years in Canada, with over $300M in assets and $40M in claims paid (across all product lines) in 2020.
Your life insurance with Canadian Premier and PolicyMe is backed by significant financial strength. Plus, Canadian Premier has approved 99 per cent of claims since 2019, so can rest easy knowing your claim will be in good hands.
Need additional pointers to get the most out of the protection you're securing for your family? Chat with a non-commissioned advisor.
How to prevent your claim from being denied
Here are the top things you can do to prevent your life insurance payout claim from being denied.
1. Be honest on your application
This one is pretty simple. If you’re honest with your life insurance provider throughout the application process, it makes it near impossible for them to deny your claim.
The majority (of a tiny amount) of declines happen due to intentional misrepresentation. If you are as honest as possible about your health from the start, you know misrepresentation won’t be an issue.
There is the option to get no medical life insurance, which requires no medical questions or exams. But no medical insurers charge higher rates since they can't properly assess your risk level.
2. Understand your policy's exclusions
Every life insurance policy has exclusions. For the most part, it's just death by suicide within the first two years. But life insurance is a pretty personal product.
Make sure you fully know the exclusions on your policy to avoid this, not just the exclusions you've heard of. Each policy is unique. For example, if you have a high-risk hobby like professional skydiving, your policy may have an exclusion for death in a skydiving accident.
When you know what your exclusions are, you know what actions will prevent you from receiving a claim. You'll also know for sure if you're eligible for the death benefit, minimizing the chances of disappointment.
Want to learn more about different life insurance providers and their offerings? Read our guide on the 20 best life insurance companies for Canadians.
3. Keep up with your payments
When you stay up to date on payments, you don’t need to worry about your policy lapsing when you need it most.
If you miss one payment by mistake, don’t panic! This doesn’t mean your insurance policy is entirely void and you need to restart the application process.
Most life insurance companies have a 30 day grace period. If you miss a payment, the company will let you know and allow you to make it up in that window. You can even opt for a double payment at your next premium due date.
In the case you go beyond the 30 day mark and don’t make the next payment, you no longer have coverage.
How do my beneficiaries make a claim?
Here's what you need to do if you are the beneficiary of a death benefit and the policyholder passes away during the term.
1. The first thing you want to do is contact your life insurance advisor if somebody passes away and you were a beneficiary of their life insurance.
2. From there, they will give you a list of documents you need and forms to fill out. Here are some of the documents and forms you can expect to need or to fill out:
3. Once you gather all this information and share it with the life insurance provider, they will do some policy checks. This includes things like checking if the policy is still active before putting the claim through.
4. From there, your only job is to wait for the claim to be processed. You can answer any questions the life insurance provider may have along the way.
There is no hard and fast rule on how long processing a claim takes. Life insurance companies tend to try to pay out as soon as possible. You can expect it anywhere between a few days to upwards of 60 days, depending on your situation.
With PolicyMe, making a claim is simple. You'll get a dedicated adjudicator who will review your claim and help you navigate the process, so you can focus on being with your family.
What do I do if my life insurance claim is denied?
If you are denied, you should be provided with a very clear reason. The insurance company needs to share the exact reason your claim is denied.
Here’s what you can do:
Bottom line: Your life insurance claim is very likely to pay out
The main reasons that your life insurance might not pay out is tied to dishonest answers to the application, or the death occurring outside of the payment terms.
Most life insurance companies hold billions of dollars in assets, meaning they already have the money in the bank to pay the death benefit.
Make sure to read your policy carefully before signing it to make sure you understand all the nitty gritty details!
If you need honest advice on what kind of policy suits your family's needs best, we've got you covered. Book a quick chat with our non-commissioned advisors and get the kind of advice we'd give even our closest friends.
FAQ: When does life insurance not pay out?
How often do life insurers deny claims?
Only around four per cent of life insurance claims are denied . The main reason is usually misrepresentation on your application.
Claims might also be denied for other reasons, like suicide during the first two years of the policy, illegal drug overdose, or if the policyholder passes away while doing something illegal or excluded from the policy.
What is the average life insurance payout in Canada?
The average Canadian household has $458,000 in coverage, according to CHLIA. But the right amount of coverage will depend on you, your loved ones, and your lifestyle. To get a better idea of what that number will be for you, use a life insurance calculator.
How long does it take for life insurance to pay out in Canada?
It usually takes a few weeks a few weeks for life insurance to pay out after a claim is made. In the event you pass away during your term, your beneficiaries will make the claim to your life insurance provider. They'll receive a payout, also known as a "death benefit," equal to the coverage you purchased. This death benefit is paid in a tax-free lump sum.
What is the time limit to claim a death benefit?
In general, there is no set time limit to make a claim, but it is important to do so as soon as possible after the death to avoid any delays or complications.
Most insurance companies recommend that beneficiaries make a claim within a few weeks to a few months after the death occurs.
Does life insurance cover suicide?
In general, life insurance policies do cover death by suicide, but there may be certain restrictions or limitations.
Most life insurance policies have what is called a "suicide clause" which states that if the policyholder dies by suicide within the contestability period after the policy is purchased (typically two years), the death benefit may not be paid out.
This is to prevent people from taking out a policy with the intention of claiming the death benefit immediately.
Do life insurance cover risky lifestyles?
Life insurance policies may have exclusions or limitations for death depending on the person seeking life insurance. For example, someone who is an avid skydiver might have an exclusion clause of their death claim not being paid out in case of a skydiving accident.
Does life insurance cover drug overdose?
If a policyholder dies as a result of illegal drug overdose outside of the contestability period, it is often a reason for the life insurance company to void your claim.
Accidental drug overdose on prescribed medication is usually covered. But can be investigated as a reason to deny your claim if the reason for taking this medication was not disclosed to your insurance provider.
Will my death benefit be paid out if I die in a car crash?
You would be surprised how often we get this question but the answer is, usually yes. You should receive the death benefit payout from your life insurance company if the policy was still in effect and you kept up to date with your payments (as we previously mentioned).
However, the specifics of what is covered and any exclusions or limitations depend on the terms and conditions of your particular policy, so it's important to review it carefully or ask your insurance provider.
Our sources:
CLHIA-ACCAP - Canadian Life and Health Insurance Facts - 2020. (n.d.). http://clhia.uberflip.com/i/1287746-canadian-life-and-health-insurance-facts-2020/9?
Dave, P. (2022, March 30). Life Insurance Clauses Determine Your Coverage. Investopedia. https://www.investopedia.com/articles/pf/06/lifeinsuranceclauses.asp
Dispute Resolution. (n.d.). Insurance Bureau of Canada. http://www.ibc.ca/nb/resources/consumer-resources/dispute-resolution
Lam, J. (2022, September 2). What are the reasons a life insurance policy won’t pay out? Insurance.com. https://www.insurance.com/life-insurance/life-insurance-basics/mistakes-that-kill-claims.html
Search for policy of a deceased | OLHI - Free, impartial help with your life & health insurance complaints. (n.d.). OLHI - Free, Impartial Help With Your Life & Health Insurance Complaints. https://olhi.ca/insurance/search-for-lost-policy/
Laura McKay
COO & Co-Founder
About the Author
Laura McKay is the co-founder and COO of PolicyMe, Canada's fastest-growing digital life insurance company. In 2021, she was named one of the Women of the Year by Bay Street Bull. Laura has a Bachelor of Mathematics from the University of Waterloo. Her degree focused on Actuarial Science, which included learning about mortality risk, the basis of life insurance pricing and valuation. After her degree, she was employed by Manulife and Munich Re in Actuarial Science. Laura then worked at famed management consulting company Oliver Wyman in New York from 2013-2018. In this position, she worked with many Fortune 500 life insurance companies and helped them develop growth strategies and solve operational problems and regulatory issues.
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