Life Insurance, Underwriting and Bankruptcy

filling-in-the-formIt’s standard practice for insurance companies to determine your life insurance premiums based on several influencing factors. These variables include the following:

  • Your age

  • Gender

  • Whether you smoke or not

  • Overall health

  • Family history for disease and medical conditions

Unfortunately, with the current economic crisis, a new factor that could influence premiums is having more and more impact on more and more Canadians everyday–bankruptcy.


More than 117,000 Canadians filed for bankruptcy over a period of 12 months ending in January 2009, an increase of 15.8% from the previous year.

-Source: Canadian Business Blog

Below is an inside look at how various Canadian insurance providers tackle bankruptcy:


Either a letter from the trustee advising that they are aware of the insurance purchase and will allow it, or a discharge.


Will consider after a discharge.

Canada Life

$100,000 is allowed, as long as the individual doesn’t have any other insurance in force.


Will consider after discharge and will also verify your current income and net worth.


Will consider after discharge.


Will consider after discharge.

Industrial Alliance

Will consider under the following conditions:

  • Personal life insurance only

  • Only after a ten year term plan, to a maximum of $100,000

  • Individual has a well-defined need

  • The plan must be accepted as standard and there will be no criticism of your lifestyle (Alcohol,driving record, criminal record).

RBC Insurance

Will consider after discharge.

Sun Life

Either a discharge, or a letter from the trustee indicating the agreement and the need for the insurance purchase.

Standard Life

Will consider after discharge.


Will consider a max of $100,000, if there is no other insurance currently in force.


Will consider after discharge.

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