Medically assisted death, also known as doctor assisted suicide or euthanasia, became legal in Canada in 2016. It allows eligible Canadians suffering from a painful, terminal illness to request assistance from a medical practitioner to intentionally end their life. This can be complicated for those with a life insurance policy, since many life insurance policies included a suicide clauses that prevent policyholders from receiving a death benefit pay out if they were to commit suicide. If you or someone you know is considering medically assisted death, keep reading to understand how the decision can affect the life insurance process.

In this article: 

• Does Medically Assisted Death Affect Life Insurance in Canada
• How Insurance Companies Investigate Medically Assisted Death Claims
  • Example Scenarios
• Pre-existing Health Conditions and Life Insurance
• No Medical Life Insurance for Those With Serious Health Concerns
• Frequently Asked Questions (FAQs) About How Medically Assisted Death Affects Life Insurance in Canada

Does Medically Assisted Death Affect Life Insurance in Canada

Life insurance policies almost always come with a contestability period stating that if a policyholder commits suicide within a certain period of time (typically 2 years), then the life insurance claim will not be paid out and premiums paid for the policy will be returned. However, while medically assisted death is a type of suicide, life insurance companies legally cannot deny a life insurance claim due to a medically assisted death.

That being said, insurance providers will likely do an investigation of your claim to ensure there was no misrepresentation of the policyholder’s health at the time the policy was obtained. An insurance provider can only deny your claim after a medically assisted death if it’s determined that the information provided to them was inaccurate, incomplete, or not truthful. But for those who accurately provided information about their health, a medically assisted death will be treated as a natural death and the claim for life insurance should be paid out.

How Insurance Companies Investigate Medically Assisted Death Claims

If there is a life insurance claim due to a medically assisted death within the contestability period (usually two years from the start of the policy), insurance companies will investigate the claim for misrepresentations, omissions, or false statements. They will be looking to see if the policyholder had a known pre-existing health condition that they did not report to the insurance company when purchasing the policy, which could potentially void the policy.

While a life insurance claim after a medically assisted death can mean your claim is carefully investigated, it’s important not to worry. As long as you provided accurate, truthful information on your application, there won’t be an issue and the policy should pay out the same way it would for death from a natural cause.

Here are some example scenarios that demonstrate how a terminal illness might affect the life insurance process:

Scenario 1: If a policyholder was already diagnosed with a terminal illness before purchasing a policy but did not make the insurance company aware of their diagnosis, their claim could later be denied. The claim investigation would involve reviewing health records and if it’s found the policyholder’s health was misrepresented, the insurance company would have the right to void the policy.

Scenario 2: If a policyholder had a terminal illness at the time the policy was purchased, but was unaware of their diagnosis until after the policy was in effect their claim may still be valid. In this case it would depend on whether they had taken steps to look into symptoms with a medical professional and if they had disclosed their health concerns and any symptoms to the insurer when purchasing the policy.

Scenario 3: If a policyholder develops a terminal illness after their policy is already in effect, then they are not obligated to disclose their illness to the insurance company unless they are renewing the terms of their policy. A medically assisted death that occurred due to a health concern developed after the policy was in place is not grounds for a claim denial.

Here is an overview of when a life insurance claim can be denied due to terminal illness:

Pre-existing Health Conditions and Life Insurance

When applying for standard life insurance, you will have to undergo medical underwriting. What this means is that you will need to undergo a life insurance medical exam, provide your medical history and family medical history, explain any medical conditions you are diagnosed with, list all medications you take, and provide information such as your age, sex, occupation, whether or not you smoke, and so on. All of this information is used to determine whether you are eligible for the policy you applied to, the maximum coverage you can receive through the policy, and how much the life insurance premiums will cost.

If you have a pre-existing medical condition then this will need to be disclosed to the life insurance company. How pre-existing conditions affect life insurance can depend on the severity of the condition and how it affects you. For example, if you have mild asthma, vitiligo, hearing loss, etc. and these conditions don’t severely impact your daily functioning, health, or life expectancy then often you can get life insurance without being impacted. However, if you have a medical condition that seriously affects your health such as leukemia, lymphoma, AIDS, etc. you will likely face much higher premiums and even policy denial. However, even those with serious health concerns are still able to get life insurance through no medical life insurance.

No Medical Life Insurance for Those With Serious Health Concerns

If you have a pre-existing health condition you will still be able to get life insurance through a simplified issue or guaranteed issue life insurance policy, also known as a no medical policy. This type of life insurance does not require a medical exam to qualify. This is a great option for those who cannot qualify for traditional life insurance, though it’s important to note that these policies do tend to be more expensive.

Those who choose simplified issue life insurance, will not need to undergo a medical exam but will still be asked some basic questions about their health. Those who choose guaranteed issue life insurance do not need to undergo a medical exam or disclose health information to their insurer at all, and policies often come with instant approvals.

It’s important to note that if medical information wasn’t required for a no-medical policy, failing to disclose it does not provide grounds for denying a life insurance claim after a medically assisted death.

Here is a quick overview of how no medical policies compare to each other and to traditional life insurance.

Frequently Asked Questions (FAQs) About How Medically Assisted Death Affects Life Insurance in Canada

Find Out More by Speaking With an Expert

If you have any more questions or need advice specific to your situation, feel free to reach out to one of our expert financial advisors who can walk you through the life insurance process. Here at Protect Your Wealth, we have been providing free expert advice and helping Canadians find life insurance since 2007. We work with and compare policies and quotes from the best life insurance companies in Canada to ensure we find the right solution for you and your needs. We provide expert life insurance solutions, including no medical life insurance, critical illness insurance, term life insurance, and permanent life insurance to build the best package and give you the protection you need.

Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, Alberta, Manitoba, and British Columbia, including areas such as Oakville, Abbotsford, Steinbach, and Grande Prairie.