The law, your rights on life insurance

We never know what life has in store for us. In the event of your death, who will pay your debts, your mortgage, the cost of your funeral? Who will provide financial support to the people you care about? Life insurance can be a solution.

Life insurance is a type of insurance that provides financial protection in the event that the insured person dies. By receiving a sum of money, certain people around the insured (children, parents, spouse, etc.) will be protected against the financial difficulties that may result from his death. This is called permanent life insurance.

Life insurance can also provide financial protection in case the insured person remains alive until a certain age or until the expiration of a certain number of years. This is called term life insurance.

Since the world of life insurance contracts is sometimes difficult to understand, here are the main rules and steps to know!

Choosing who will be the insured person

One of the first things to do before applying for life insurance is obviously to choose the person whose life will be insured. This person is called the “insured”.

You then have two choices: take out life insurance on your own life or on the life of another person.

If you take out life insurance on another person’s life, you must first obtain their written permission. However, this permission is not necessary if it is a person whose life is of interest to you. For instance :

  • your partner;
  • your child or that of your spouse;
  • your grandchild or that of your spouse;
  • your father or your mother;
  • one of your grandparents;
  • a person who contributes to your support or education;
  • your attendant;
  • your staff;
  • another person whose life or health is of financial interest to you (such as a business partner) or moral interest (such as a close friend).

Choose who will receive the life insurance benefit

You can choose the “beneficiary” or “beneficiaries” of the life insurance, ie the person or persons who will be able to receive the insurance indemnity when the insured person dies or reaches a certain age.

You are free to choose  the person who will be the beneficiary of the insurance. You can sometimes be this beneficiary yourself. You can also choose a charity or even a person who does not yet exist, such as your “future child”.

Insurers generally require that the beneficiary have some connection or interest with the insured.

Caution ! If no beneficiary has been specified in the life insurance contract, it is the person who concluded the contract (the “policyholder”) or his heirs who may receive the insurance indemnity.

Change the person who will receive the life insurance benefit

In principle, you can change the beneficiary or beneficiaries of your life insurance contract. All you have to do is notify your insurer, in writing, of your decision.

However, two situations require you to obtain the permission of the current beneficiary before making this change:

  • when a statement in the contract indicates that the “beneficiary designation is irrevocable”; Where
  • when the current beneficiary of the insurance is your married or civil union spouse, unless this designation is “revocable”.

It is also possible to change the beneficiary in your will if the beneficiary is “revocable”. You don’t need their permission to change it.

Declare the true state of health of the insured person

In your initial declaration of risk, you must declare the true state of health of the insured. It may therefore be your own state of health or that of the person you have chosen to insure.

You must answer the insurer’s questions to the best of your knowledge and in all honesty. This means that you should not lie or avoid revealing important details, such as the fact that you are a smoker or have a genetic disease.

If you do not declare the true state of health of the insured, the insurer could ask a court to cancel your life insurance contract.

Caution ! Once  the contract begins to  protect you  (see below) you are  no longer obliged to  inform it if the state of health of the insured person changes.  

Declare the actual age of the insured person

In your initial declaration of risk, you must declare the actual age of the insured. This may therefore be your actual age or the actual age of the person you have chosen to insure.

If the age you declare is not the actual age of the insured, the insurer can ask a court to cancel your life insurance contract.

However, for the contract to be voidable, the following conditions must be met:

  • the insured’s actual age was not part of the insurer’s rates when it accepted your application. For example, the actual age of the insured was 63 and the insurer never insures people over 60;
  • the insured is still alive when the insurer makes its request for cancellation; and
  • the insurer’s cancellation request is made no later than:
  • within three years  of the conclusion of the contract; and
  • 60 days after the discovery of the real age of the insured.

If the insurer does not request the cancellation of the contract, he can simply adjust the amount of the insurance indemnity. He will do this by establishing the ratio between the premium you have already paid and the one you should have paid according to the real age of the insured.

It is therefore possible that the insurance indemnity decreases given the actual age of the insured.

The start of protection

Life insurance begins to protect you as soon as the insurer accepts your proposal, but only if the following three conditions are met:

  1. The insurer has accepted your  proposal without changing anything.
  2. There has been no change in the insured’s state of health or situation between the time you made your proposal and the time the insurer accepted it.
    • For example, if you learn between these two moments that you have a serious illness, your life insurance cannot begin. You will then have to declare your illness to the insurer in a new proposal.
  3. You have paid the first of the installments of money required under your life insurance policy (officially called “premiums”).

pay life insurance

The amounts of money you must pay to your insurer to take advantage of life insurance are called “premiums”.

They vary, among other things, according to the amount of the insurance indemnity. They can also vary depending on the type of life insurance you have chosen between permanent insurance (valid until the death of the insured) or term insurance (valid for 15 years for example).

You must pay the premiums at the time stipulated in the insurance contract. A late premium can however be paid within 30 days (except the first premium which must be paid at the due time). If you exceed this period, the insurance contract automatically ends.
Be aware that it is possible to “reactivate” life insurance that has ended due to non-payment of a premium. For more details, contact your insurer.

Receive the life insurance benefit

The beneficiary may receive the insurance indemnity if the event provided for in the life insurance contract occurs. It may be the death of the insured or the fact that he has reached a certain age.

If the insurance contract so provides, the beneficiary or the insured must then send the insurer certain documents to prove the event. This may be, for example, the “certificate of death” of the insured.

After receiving these documents, the insurer must pay the insurance indemnity within 30 days.

Suicide of the insured person

If the insured commits suicide, the insurer may refuse to pay the indemnity if:

  • the life insurance contract contains an  exclusion to the effect that the beneficiary will not be entitled to an indemnity if the death of the insured is caused by suicide; and
  • the life insurance contract has protected the insured for less than two years.

Injury to the life of the insured person

If the beneficiary harms the life of the insured in order to be compensated more quickly, the insurer may refuse to pay the insurance indemnity. He will then have to prove it in court.

If it is the holder who damages the life of the insured, the contract automatically ends.

The end of protection

The life insurance contract ends and ceases to protect the insured at the time provided for in the insurance contract or at the time subsequently agreed with the insurer.

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