Life Insurance and Suicide

It’s a tough subject.  About 4,000 Canadians commit suicide each year.  About another 8,000 die through Medical Assistance in Dying (MAID). 

Those with life insurance policies will usually want their loved ones to receive the payout.

But will the insurance company pay?

In most cases: Yes.  If (1) it is a private policy (as opposed to a group policy through employment), and (2) the suicide occurred at least two years after the policy was purchased, most policies pay in full.  If the suicide occurred in less than the set period, the insurer must pay all the premiums to the beneficiary.

Some insurers have a shorter exclusion period: 12 months is becoming more common.

Over 95% of life insurance policies in Canda cover death by suicide.  About 320,000 Canadians die each year from all causes.  So, fewer than 4% of deaths are by suicide or MAID.  That’s a very small number for insurance companies to pay for, along with other “choices” like smoking, obesity, skydiving, and texting while driving.

Group insurance through employment may have different terms.  They need to be checked.

Some of the life insurers who pay out in case of suicide (after the exclusion period) are:

·       BMO Insurance

·       Canada Life

·       Co-Operators

·       Desjardins

·       Industrial Alliance (iA Groupe)

·       London Life

·       Manulife

·       Primerica

·       RBC Insurance

·       Sunlife

·       TD Insurance

·       Wawanesa

·       Zurich

In order to refuse to pay out for suicide, the insurance company has to prove it was suicide.  The odds are stacked against the company.  First, there is a presumption against suicide.  Second, the insurer has to prove suicide “clearly and unequivocally”.  Even previous (failed) suicide attempts are not admissible as evidence that this death was suicide. 

Interestingly, MAID is not considered suicide.  The Canadian Life and Health Insurance Association (a voluntary industry group) says that following the legislated MAID policy will result in the death not being deemed a suicide.  That means the policy should pay out no matter how long (or short) a time since the policy started.  Again: Check with your insurer.

Everyone dies.  Some will die by their own hands, or by MAID. So long as they did not buy the policy intending to defraud the insurer, they deserve to have the benefit paid.  It will be the beneficiaries who have to force the insurer to pay.  Anyone who is in such a bad situation that they decide to end their own life should not allow their insurance company to cheat their beneficiaries.

Check your policy. 

If you are thinking about suicide and want help, call 1.833.456.4566.  Someone will answer 24/7. 

If you are the executor or think you are the beneficiary of a life insurance policy: Check.  Do not trust the insurance company to step forward with a cheque.

At Clear Legal, we give clear advice, even about the darkest things.