Work-based life insurance question (Canada)

November 10, 2017 5:49 PM

I've been made permanent after 4 months at my job, and this comes with some small amount of insurance of various kinds. I have to name a beneficiary for the life insurance bit.

I have no relatives and no partner. I've asked whether the beneficiary would be on the hook for anything – taxes, any debts left my me – and they can't tell me. So I haven't named anyone yet.

I am in good health so this isn't an immediate concern, but I still have to name someone on the document and I want to make sure it's a person who can handle any extra hassle in their life for a few grand should I pop my clogs prematurely.

posted by zadcat to Work & Money (3 answers total)

I think this depends on your benifit plan's underwriter but an acquaintance in a similar situation (Alberta, early oughts) was able to name a charity instead of an individual.
posted by mce at 6:12 PM on November 10, 2017

Best answer: Any Canadian insurance policy I've signed through work has given me the choice of designating an individual or my estate as the beneficiary of the life insurance policy. The main difference - and insurance and estate law varies by province, also IANAL - is that an individual beneficiary is paid the life insurance benefit directly. If you designate your estate as the beneficiary, the benefit is then (obviously) paid out to the estate, which is in turn on the hook for taxes, debts, etc. that you were on the hook for while alive. An individual beneficiary wouldn't be since the money is going directly to them as an individual vs. what remains of deceased you as a legal entity (your estate). They would just get the life insurance benefit from your policy straight up, AFAIK.

Sometimes people leave their life insurance benefit to their estate to help clean up outstanding debts, taxes and so on, but that's an individual choice based on personal circumstances and legal/financial planning advice specific to their situation.
posted by mandolin conspiracy at 6:16 PM on November 10, 2017 [1 favorite]

In the USA , but life insurance through the company named my parents as beneficiaries, and then felt beer sad about it. Life insurance isn't about your benefit, but someone's.
posted by TheAdamist at 7:08 PM on November 10, 2017