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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

What is a life insurance death benefit?

Key takeaways

  • A death benefit is a one-time, tax-free payment made to the beneficiaries of an insured person who has died.
  • We pay 90% of life insurance claims within 8 business days of receiving the necessary information.

What is a death benefit?

A death benefit is the money paid to your beneficiaries by the life insurance company after you die. It’s normally a tax-free, one-time payment.

How do death benefits work?

Beneficiaries

Death benefits are paid to a life insurance policy’s beneficiary or beneficiaries. Beneficiaries are most often your spouse or partner, children or other loved ones. However, you can also make a charity or other organization a beneficiary.

When you name more than 1 beneficiary in a life insurance policy, you must say how much of the death benefit each beneficiary should receive either as a dollar amount or a percentage.

Primary beneficiaries are those named be first-in-line to receive a death benefit under a life insurance policy. Contingent beneficiaries are beneficiaries who will only be eligible to receive death benefits if all primary beneficiaries have predeceased the life insured under the policy.

Death benefit amount

The amount of death benefit will depend on the amount of coverage purchased under the life insurance policy. If the life insurance policy has 1 or more add-ons, known as riders, they can affect the death benefit amount.

How long will it take for a death benefit to be paid?

Insurers are generally required, in most provinces, to pay a beneficiary within 30 days after having received all claim requirements from the beneficiary.

Once we receive the necessary information, 90% of death benefits are paid to beneficiaries within 8 business days.1

Why might a death benefit not be paid?

Some of the reasons a death benefit might not be paid include:

  • A lapse in coverage due to coverage ending or missing premium payments.
  • Cause of death isn’t covered by the life insurance policy (e.g., extreme sports, dangerous hobbies, illegal activities, suicide).
  • Giving false information or lying on the insurance application.

How do you make a death benefit claim?

When someone dies, their death benefit isn’t automatically paid. Their beneficiary must file a claim with the insurer to let them know the insured person has died.

The beneficiary will likely be asked for:

  • A completed claim form
  • A copy of the death certificate
  • The life insurance policy number or a copy of the policy

The beneficiary can contact the OmbudService for Life and Health Insurance (OLHI)Opens a new website in a new window if they need help looking for a life insurance policy.

Once all the information has been given to the insurer, the insurer will then process the claim. The benefit payment is almost always tax-free.

You can contact your provincial regulator if you’re having problems with your claim. They oversee the activities of insurance companies in their respective provinces. The OLHI can also give free information and help.

If your life insurance is with Canada Life, we have simplified steps to make it easy for you. Call us at 1-888-252-1847 (Canada and U.S.) or 1-416-597-6981 (rest of the world). 

Uses for the death benefit

You can use the death benefit money any way you wish. It’s most often to:

  • Provide financial stability to those left behind.
  • Pay for the deceased’s final expenses including funeral costs and debts.
  • Cover a mortgage or replace income.
  • Help pay for a child’s education.
  • Leave a legacy for future generations or for a charity.

What’s next?

The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. 

  • 1 Payment figures are for individual life insurance claims for payouts on death, paid in 2022.

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