Learn How Your Family Can File a Life Insurance Claim in Canada

By: Updated: September 14, 2016


You’ve protected your family by buying life insurance, but you’re not done yet — you have to share the details with them.

It’s vital to tell that person or persons not only that you’ve taken out a policy, but also your insurance advisor's contact information and the life insurance company that is holding the policy. Without this critical knowledge, your beneficiary may not be able reach the insurer to submit a claim.

There’s another important step to take after purchasing a life insurance policy before you can consider the job of protecting your family done: You need to share this important information with your beneficiary and executor (your spouse, your children, a sibling, a business partner) — whoever you’ve designated on your policy). It is important to prepare beforehand such that your family can file a life insurance claim in Canada without experiencing significant difficulties.

Buying life insurance is one of the most unselfish things you can do. You purchase the policy and pay the premiums to ensure the people you love receive a benefit when you die. You intend to provide for them financially in your absence, to leave them a significant legacy or at least to help pay for your funeral. But if your beneficiaries don’t know they’re named on your policy, your insurance advisor's contact information, which life insurance company holds the policy or even how to file a claim, your good intentions may not be realized.

Have a talk with your family

A 2013 survey report from BMO Financial Group revealed that Canadians understand the importance of talking to family members about their estate plans, but need some help in providing the details. Discussing life-and-death matters may be uncomfortable, but it’s important to leave family members with clarity and order so that your estate may be distributed and administered smoothly.

To make this easier, the Canadian Life and Health Insurance Association, a voluntary association whose member companies comprise 99% of Canada’s life and health insurers, has produced Your Virtual Shoebox Guide, an interactive tool to help people keep track of important personal and family documents — everything from insurance policies, bank accounts, investments and mortgages to health records and will and estate information.

If you find it too difficult to broach this topic with your family, consider making your insurance advisor part of the conversation. He or she can act as a facilitator, and provide other resources to help you tackle the topic.

People often buy insurance policies and forget them. But by having open, honest and comprehensive conversations with your family regarding your estate plans, you can help ensure that everyone gets all benefits you have intended for them.

The steps to file a claim

Here's the steps your family needs to take in order to successfully file a life insurance claim:

1. Obtain death certificates

The keystone to filing life insurance claims is to get copies of the death certificates. In general, completing and filing the death certificate is the responsibility of the funeral director. Depending on the cause of death and whether an autopsy is performed, it can take 2 to 12 weeks for the final death certificate to be ready.

The funeral home will typically give your family up to 10 copies at no charge. If you need more copies, you can order them directly from the funeral home. There may be a charge for this service.

2. Contact your insurance advisor and life insurance companies

Once your family members have the policy information and death certificates, they should contact each insurance company to find out the current claim procedure. If the insurance was purchased through an insurance advisor, he or she can help you in dealing with the life insurance company.

Related Reading: Don't Rely on Group Insurance, Get an Individual Life Insurance Policy

3. Complete the claim procedures

Each insurance company will have its own rules and methods. Some may have online claims processes, most will require that beneficiaries fill out and submit a hard copy claim.

It is critical that your beneficiaries follow the claims instructions exactly. Submit all the information and the required attachments. As the beneficiary, you may be required to submit proof of your identity. Failure to follow the procedures may lead to delays or rejection of the claim.

Receiving the proceeds of the insurance claim

Now that your family has successfully filed the claim, there are several factors for them to consider when receiving the proceeds of the claim.

1. Evaluate your payment options

Depending on the type of policy and amount of the death benefit, there may be several options for receiving the payout. For substantial payouts, consider consulting with an investment adviser to maximize your benefits.

  • Your beneficiary can take a lump sum payment. For most smaller policies, this may be your only option.
  • For larger benefits, a beneficiary can often negotiate a structured settlement that gives them a steady income from the principal and interest on the policy.
2. Receive and distribute the payout from the claim
In a lump sum distribution, your beneficiary will receive a single cheque made payable to them. In structured settlements, they may receive cheques or electronic funds transfers.
Typical claims processing take 30 to 60 days after the application is complete. The beneficiary should contact the insurance company if they have not received an update on the claim in 30 days after all information was submitted.
3. Deal with a rejected life insurance claim
Payouts are rarely disputed. However, there are a few common reasons why a claim is delayed or denied.
  • If the premiums weren't paid and the policy lapsed. In this case, your beneficiary should ask to see proof that the policy was in default.
  • The insured provided incorrect information on his or her application. If the policy was issued based on faulty health data or omissions such as smoking or medical history, the company may either deny the claim, or reduce the payout.
  • The paperwork was incomplete. Generally, the insurance company must inform the beneficiary within 30 to 60 days if the claim package is missing any required forms, certificates, or other information.

If your beneficiary receives a rejection, they should not delay their objection to this ruling. Your beneficiary should ask for details on the rejection in writing. If the insurance company does not reply in a reasonable time, usually 30 days, they should not hesitate to take further action.

Be sure to involve your insurance advisor in the event of a claim denial; their experience will prove to be a valuable asset.

Interested in learning more about Life Insurance and how it can protect your family? Download our free ebook: The Beginner's Guide to Life Insurance.

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