Life insurance

There are several types of insurance, each with a specific purpose, since we don’t all need the same product. Term insurance, for example, covers you for a fixed period (often 10 to 45 years) and is used to protect an estate against needs that are also temporary, such as paying off a line of credit, taking care of your mortgage, providing financial security for dependent children, etc.

Permanent life insurance covers you for life, regardless of your age at the time of death. This is excellent coverage to cover funeral expenses and handle taxes resulting from the sale of a home, an income property or a cottage to enrich your estate.

Some life insurance products have dividend and investment options within the policy itself. The costs and options in the contracts can be very different depending on the needs to be met. Consult our advisors for personalized, objective recommendations.

When you take out individual, group, or association insurance, you can designate your beneficiary yourself and even designate more than one. The insurer will pay the designated beneficiaries the sum due to them in the event of your death. Life insurance will not be used to settle your estate unless you specifically designate your estate as the beneficiary.

The designation may be revocable or irrevocable. Note that an irrevocable beneficiary must approve any change to the contract, including changing the beneficiary designation.

In Quebec, if you designate your spouse as the beneficiary, this choice automatically becomes irrevocable, unless you indicate it as revocable. Divorce nullifies the designation of an ex-spouse as beneficiary, but not separation. Elsewhere in Canada, the designation of the spouse (by marriage or civil union) as the beneficiary is revocable unless otherwise indicated.

Designating a minor child as a beneficiary has important legal consequences. A minor child who receives more than $40,000 will have to be taken into guardianship. It may be advisable to define the distribution and use of the funds, as well as the person to manage them, inside the will.

Any designation can be changed along the way, either with your advisor, your insurer or in your will. Otherwise, be aware that the Quebec Civil Code provides for a distribution of the inheritance in the case of a legal succession. See here for more information.

Designating an irrevocable beneficiary removes a substantial amount of control over the policy. When an irrevocable beneficiary is designated, their consent is required for future transactions affecting the policy, such as a surrender or a policy loan. In Quebec only, a certified copy of the divorce judgment must be attached to a policy change request if the signature of the ex-spouse (as irrevocable beneficiary) cannot be obtained.

This is done on a case-by-case basis. Each insurer will ask you to complete their own documents. You may need to meet with a nurse to complete a medical questionnaire. Depending on the anticipated insurance amount and your age, the insurer may request that this be completed at the beginning. Otherwise, the insurer may require it later depending on the answers to the questionnaire.

Yes, they may also request to see your medical records, in which case they will contact your healthcare professional with your authorization. If documents are requested, you will be notified and the application process will be suspended pending receipt of the requested documents.

Insurance premiums are often offered at a standard rate. Depending upon your state of health and the information provided on the medical questionnaire, the insurer could grant coverage either with a preferential rate or an additional premium.