Does Life Insurance Pay For Suicidal Death In Canada?

Canadians are looking deeper into specific aspects of life insurance due to volatile international economic conditions. Every person wants to secure their monthly budget and leave behind a sense of financial security for their loved ones. 

Canadians purchase life insurance to leave behind funds and resources for their loved ones in the event of their demise. But what happens if a life insurance policyholder dies due to suicide?

What Is Life Insurance?

Life insurance is a contract between an insurance provider and a policyholder. The insurance provider agrees to pay an agreed amount of compensation to the policyholder’s beneficiaries in the event of certain conditions within a given duration. The precondition is the policyholder’s death, and the time period is the validity of the life insurance policy. In return, the policyholder agrees to pay premiums to the insurance provider to ensure the legitimacy of the life insurance contract.

Life insurance covers many different sections or articles in the contract, and each section is a condition that both parties must agree on for the life insurance contract. Some articles of life insurance contracts include coverage amount, beneficiary names, type of policy, duration of the policy, conditions for repayment of loans, and coverage for funeral expenses. The policyholder provides the answer to some of these articles in the contract. The insurance provider establishes the terms and conditions of the life insurance contract.

The insurance provider has a legal obligation to fulfill the life insurance contract provided that the policyholder continues to pay the current premiums. A whole life insurance policy is valid for as long as the policyholder is alive. Beneficiaries of a whole life insurance policy get compensation whenever the policyholder passes away as long as all the premiums payments are up-to-date.

Suicide In Canada

Suicide is the second leading cause of death for people between the ages of 15 and 34 and the ninth leading cause of death overall in Canada. Every year about 4,000 people die as a result of suicide in Canada. Approximately 11 people die of suicide every day in Canada. According to the statistics, men in Canada are more likely to die of suicide in comparison to women.

The Criminal Code in Canada introduced in 1892 mentioned that suicide and assisted suicide are criminal offenses. In 1972 suicide was decriminalized, but according to Section 241(b),  assisted suicide is still illegal. Anyone found guilty of helping someone take their own life is liable to up to 14 years in prison. It is a subject of debate in federal and provincial legislatures whether physician-assisted suicide is illegal for individuals who can not perform physically without assistance.

The Opposing Views Between Assisted Suicide & Euthanasia

Assisted suicide is an active approach to help someone commit suicide. For example, assisted suicide is when a physician informs or provides lethal drugs to an individual who ends up killing themself. Without the physician’s information, the person would not commit suicide. The person committed suicide with the voluntary intention to do so.

Euthanasia is when family members or doctors intervene to cause the death of an individual to put an end to their suffering. The decision of the family members or doctors is the cause of the death of the person. For example, a person is in a constant state of unconsciousness undergoing permanent medical treatment because their body can not function without medical procedures. Family members or doctors intervene to discontinue the medical treatment because there is no chance of the individual recuperating.

Euthanasia would still be the case if the person is in a semi-conscious state and concedes to end the medical treatment that would result in their demise.

What Is A Medically Assisted Death?

June 17, 2016, the MAID Act sets out conventional procedures and eligibility conditions for individuals seeking medically assisted suicide. The first condition is that the individual must be at least 18 years of age. The second condition is that the person must have a “grievous and irremediable medical condition” which causes “enduring physical or psychological suffering that is intolerable.” In addition, the individual should be in an “advanced state of irreversible decline” for which “natural death has become reasonably foreseeable.”

March 17, 2021, was the first time the Medical Assistance In Dying (MAID) legislation became law. The individual’s death does not need to be reasonably foreseeable for a person to seek medical assistance in dying. It also outlines specific medical and constitutional requirements that need to be met before the person can legally seek medical assistance in dying. Individuals with a mental illness can not seek medical assistance in dying.

Does Life Insurance Pay For Suicidal Death In Canada?

The main factor that influences the answer to the question is the duration the life insurance policy has been in place. Life insurance providers will not compensate beneficiaries if the suicidal death takes place in the first two years of the policy. In such a case, life insurance providers return the paid premiums. After the first two years of the policy, life insurance providers treat the suicidal death like any other death and provide compensation to the beneficiaries.

Life insurance providers reserve the right to investigate a claim after the death of the policyholder. Life insurance providers have a keen eye for any misrepresentations made when purchasing the policy. Life insurance providers can deny a claim if they find that there was a misrepresentation to declare a history of mental instability or depression by the policyholder.

Life Insurance Payouts For A Medically Assisted Death

All life insurance providers treat medically assisted deaths in the same way. Life insurance providers provide full compensation if the policyholder dies a medically assisted death regardless of how long the policy has been in place. The key to remember is that all of the conditions of a medically assisted death must be met by the policyholder to differentiate this death from suicide.

Consult A Professional Insurance Broker

McIver Insurance can help you make sense of the exact kind of life insurance policy you need based on your situation. They understand all of the exclusionary clauses that life insurance providers can have, and strive to find a life insurance policy based on your specific requirements.

We recommend individuals seeking to purchase a new life insurance policy consult with a McIver insurance broker to fully understand how the life insurance policy plays out in their best interest. A consultation does not mean that you are obligated to make any commitments. Seeking professional advice can help you save time and money!