Do You Need a Beneficiary Checkup?

Posted on November 13, 2013 and updated March 20, 2018 in Insurance Types, Life Insurance Canada News, Term Insurance 4 min read

In the United States, over $1 billion in life insurance policies go unclaimed and in Canada 22% of the people who request searches for lost life insurance policies from the Canadian Life and Health OmbudService find policies, some paying out to the tune of $210,000. 

To avoid such a search, it’s crucial that your beneficiary know that you have a policy in place. Keep your life insurance policies — or at the very least a summary of your life insurance policies — with your other important financial documents, such as wills, investment papers, and bank statements. This will help someone notify the insurance company when you die and make sure the policy pays out.

For policyholders, our advice is to name a beneficiary. If no beneficiaries are in place, the insurance company automatically designates the beneficiary as the estate. This could go against the insured’s wishes. For example, an estranged spouse could get the money, rather than the insured children. Plus, the funds are subject to probate fees, which vary depending on the province you live in and the assets in the estate. If they are based on a percentage of the estate, that percentage can be as much as 2% or less.

Below is a breakdown of the probate fees by province from The Estate Law Canada Blog:


Alberta  $25 for estates under $10,000
             $100 for estates between $10,000 and $24,999
             $200 for estates between $25,000 and $124,999
             $300 for estates between $125,000 and $249,999
             $400 for estates of $250,000 or more

British Columbia  $0 for estates under $10,000
                            $208 for estates between $10,001 and $25,000
                           $6 for every $1,000 (or part of $1,000) by which the value of the estate exceeds $25,000 but is not more than                                    $50,000. Plus $14 for every $1,000 (or part of $1,000) by which the value of the estate exceeds $50,000

Manitoba    $50 for the first $10,000
                  $6 for every $1,000 by which the value of the estate exceeds $10,000.

New Brunswick  $5 for each $1,000

Newfoundland and Labrador $85 for the first $10,000
                                             $5 for every $1,000 by which the value of the estate exceeds $10,000
                                             Plus $50 for the probate order


Northwest Territories $25 for estates under $10,000
                                  $100 for estates between $10,000 and $25,000
                                  $200 for estates between $25,000 and $125,000
                                  $300 for estates between $125,000 and $250,000
                                  $400 for estates worth $250,000 or more

Nova Scotia              $70 for estates under $10,000
                                $176 for estates between $10,000 and $25,000
                                $293 for estates between $25,000 and $50,000
                                $820 for estates between $50,000 and $100,000
                                Plus $13.85 for each $1,000 (or part of $1,000) by which the value of the estate exceeds $100,000

Nunavut                  $25 for estates under $10,000
                               $100 for estates between $10,000 and $25,000
                               $200 for estates between $25,000 and $125,000
                               $300 for estates between $125,000 and $250,000
                               $400 for estates worth $250,000 or more

Ontario                   $5 for each $1,000 for the first $50,000
                              Plus $15 for each $1,000 (or part of $1,000) by which the value of the estate exceeds $50,000

Prince Edward Island $50 for estates up to 10,000
                                 $400 for estates from $10,001 to $100,000
                                 Plus $4 for each $1,000 (or part of $1,000) by which the value of the estate exceeds $100,000
                                 Plus closing fee of 0.2%

Quebec                    $0 for notarial wills
                               $65 for non-notarial wills

Saskatchewan        $7 for every $1,000 (or part of $1,000) of estate value

Yukon                   $0 for estates up to $25,000
                             $140 for estates that exceed $25,000
 

Some existing policies may have a deceased person as a beneficiary. The insured may not had designated a contingent beneficiary (a secondary beneficiary) if the insured and primary beneficiary die together. The insured may have had a new child that needs to be added as a contingent beneficiary. If the child is under 18, a trustee should be added.

For advice on how to adjust your beneficiary, call us at 1-866-899-4849, or visit our Term Life Insurance Quote Page.

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Term Life Online
Term Life Online

In addition, it’s a good idea to review your beneficiaries on a regular basis, as major life events like having a child, death of a spouse, or getting divorced may require a change in beneficiaries to your existing life insurance policy. You can contact your life insurance company to send you new beneficiary designation forms to make any changes that are needed.

LSM Insurance
LSM Insurance

Good point on reviewing your beneficiaries on a regular basis,