March 25, 2022

10 questions about life insurance you’re afraid to ask

By Anne Levy-Ward

What does life insurance cover – and not cover? Who can get life insurance – and who can’t? Find the answers to these and other important questions.

Getting life insurance for you and your loved ones is a big decision. The process can be very personal – and you may be reluctant to share details about your health or to think about death. You may also wonder whether your questions will raise doubts about your health or motivations. By answering some of the questions you may not want to ask, you’ll feel empowered to make better decisions for you and your family. 

Will my advisor be suspicious if I want to take out a large policy on my spouse?

First of all, you can’t insure an adult in real life without their knowing about it. (So much for the stories they tell in movies.) Also, the age and income of the insured person is a factor in determining the size of a policy. This makes sense, because life insurance can be used to replace the insured’s income for a period of time. It’s not intended to create an estate. 

For example, there may be a policy-size cap of 25 times the annual income of someone under 40. Suppose your 35-year-old spouse earns $80,000 per year. You could insure them for no more than $2 million. As the usual retirement age gets closer, the limit drops. Between 50 and 60, the cap could shrink to 10 times annual income, for example. So, your insurer may limit a new policy to $1.5 million on your 55-year-old spouse who earns $150,000 per year. The amount of insurance you’re applying for needs to make sense. There must be a clear need for the coverage. If your spouse doesn’t have a multi-million-dollar income but you want a multi-million-dollar policy, your advisor may wonder why.  

Can I get life insurance with my health condition?

That depends on what the condition is, and how severe. Timely detection and effective treatment and management of many illnesses are resulting in improved life expectancies. And insurance underwriting reflects this progress. The best way to find out whether you’re insurable is to talk to an advisor. If your advisor feels you are insurable, the next step is to submit your application for full underwriting. If a medical professional determines that your condition is sufficiently serious, however, you might have to pay a higher premium.  

If you’re completely uninsurable,* you can still buy a “guaranteed issue” policy with no health questions. Such policies are small – typically no more than $25,000 – and can help families with funeral expenses.

Want to know more about Guaranteed Life insurance?

Check out Sun Life Go.

*(If you can’t get a conventional insurance policy because your risk of death is too great, you are considered uninsurable.)

Can I get life insurance if I have a hazardous hobby?

It depends on how hazardous it is. Let’s say you’re learning to skydive. To help decide, the underwriter will look at the mortality rates* for skydivers. There are several outcomes, up to and including denying coverage altogether. The insurer might choose to charge you a higher premium. Or your policy might exclude death while skydiving, while still covering other causes of death. 

*(Insurers use mortality tables to determine your life expectancy, based on the known risks to your health and lifestyle.)  

Am I too old to get life insurance?

Generally speaking, the older you are, the more life insurance costs you. That’s because over time, your chance of death increases. Term policies typically have purchase-age limits that correspond with the length of the term. 

For example, you may be able to buy: 

  • a 10-year term policy up to age 75, or 
  • a 30-year term only up to age 55. 

Why might you want life insurance when you’re older, if you no longer have dependents or a mortgage? You might still want to buy life insurance to pay for your funeral. Or, you may buy a policy because the tax-free death benefit can help your children manage your estate expenses. You can buy permanent life insurance in your 50s, 60s or even 70s.

Does life insurance cover COVID-19?

Yes, it can. In 2020, Canadian insurers paid $154 million in individual and group life insurance claims from deaths related to COVID-19. That’s according to a report from the Canadian Life and Health Insurance Association (CLHIA). In total, Canadian insurers paid $14.3 billion in individual and group life insurance benefits that year. 

Do you have more questions about life insurance?

An advisor can help. 

Find a Sun Life advisor.

Does life insurance cover suicide? What about murder?

Life insurance can cover a death by suicide often, as long as the insured person buys the policy at least two years before their death. The rules may vary among insurers, so check the fine print. Insurers generally cover death by murder if the beneficiary isn’t the murderer, or even involved in the murder.

Yes, if you have an “insurable interest” in that person. That means that the death of that person would cause you financial hardship. For instance, you could take out a policy on your business partner, with yourself as beneficiary. That’s because you depend on that person to help run your business. The insurable interest rule helps prevent people from profiting from the deaths of others. If the insurable interest isn’t clear on your application, the underwriter may contact you for more details.

Do I have to list my spouse as my beneficiary?   

You can name anyone you want as your beneficiary – your spouse, children, a friend or even a charity – as long as they have an insurable interest in your life. Married people routinely make their spouses and children their beneficiaries. That’s because they will be most affected financially by their spouse or parent’s death. 

What happens if I outlive my term life insurance?

Term life insurance covers you for a set term (or amount of time), like 20 or 30 years. At the end of the term, the coverage stops. (That is, if you don’t renew it or convert it to a permanent policy.) People often buy term policies because they feel they only need insurance for a limited time. That could be for the length of a mortgage, or until their children grow up. 

Term insurance is also usually less costly at the outset than permanent insurance. By the time your term expires, insuring your life could cost you considerably more. That’s because you’re that much older than when your original term began, and your health may have deteriorated. You could still need life insurance when your term expires, though. For example, you could be supporting an adult child or a grandchild. You may be able to renew your term policy at a higher cost. Or, you may be able to convert your term insurance to permanent life insurance, under certain conditions. 

Will I get the money in time to pay for the funeral?

As the beneficiary of a life insurance policy, you can file a claim as soon as you get the proof of death form. The funeral home will usually provide several of these within two or three days, once you’ve made the arrangements. If your claim is straightforward, you can expect a payment as soon as 10 to 14 days after filing it. Most funeral homes have no problem with waiting for a life insurance death benefit to receive payment. It’s wise to confirm this, however, when you’re making arrangements.

Who can answer even more questions about life insurance?

A Sun Life advisor can answer your questions, and help you learn more about how life insurance works and what kind of coverage is the best for you. Find an advisor. 

Do you already know what kind of life insurance you want? Get a quote.

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

Get free tips, tools and resources for living brighter today and in retirement.

I understand I can unsubscribe at any time and acknowledge that this email address belongs to me. Learn more about privacy and how we collect data to provide you with more relevant content.

Tools & calculators

Life insurance calculator

Calculate how much life insurance you might need to help protect the people you love if you die.

Life expectancy calculator

Use this calculator to estimate how long you might live and to see what you can do to live a longer, healthier life – now and in retirement.

Net worth calculator

Use this calculator to find out how your net worth – the difference between what you own (your assets) and  what you owe (your liabilities) compares to other Canadians.

Need advice? Talk to a Sun Life advisor

They'll work with you to understand your goals and help you develop a personalized plan.

Apply for life insurance now

You can buy some of our life insurance products online.