Montreal-based Sun Life insurance wants industry to review suicide rules

The head of Sun Life's Canadian operations wants his industry to relax the restrictions surrounding life insurance benefits in the event of suicide in order to take into account the exceptional context of certain tragedies.

"We're working with the industry," said Sun Life Canada president Jacques Goulet, in an interview during a speech to the Metropolitan Montreal Chamber of Commerce on Thursday. "It's complicated for all the players to agree. If things don't move forward at industry level, we'll consider whether we're going it alone or not, but we'd like to do it better within the industry.

The industry standard is to refuse to pay benefits when the insured dies by suicide less than 24 months after signing the policy. In this case, the insurer would only refund the premiums paid.

"This standard clause sometimes leads to heart-breaking situations," said Goulet.

He recounts a "very recent" case that came up at his office.

The young woman in question had signed a life insurance policy when she had no known mental health issues. She subsequently became pregnant with her second child. After giving birth, she suffered post-partum depression, which eventually led to her suicide less than 24 months after signing the policy.

"As a young father, her partner was not entitled to the financial support provided for in the life insurance policy at a time of great vulnerability. Following this, we decided to change things," said Goulet.

The issue is complex, Goulet added.

The 24-month clause is designed to avoid fraud cases where an insured signs a contract knowing that he or she is thinking of committing an irreparable act. In rare cases, people may take their own lives because of a mental health problem that arises after they have signed the policy.

"In the case I have described, it is absolutely clear that this is not a case of fraud," said Goulet. "When she applied, the woman was in perfect health. It's clear that depression followed childbirth. So we have to find a way of differentiating, and that's why it's not easy, but just because it's not easy doesn't mean we can't do it."

Discussions are "progressing well" with other insurers. Without naming them, Goulet said that the major Canadian insurers were all taking part in the discussions.

He would not commit to a timetable, but mentioned the possibility of reaching an agreement in 2024.

"There is a lot of actuarial work behind all this, risk assessment, etc.," he said.

INCREASE NUMBER OF MENTAL HEALTH CASES

Mental health problems have seen a "structural" increase in Canada in the light of claims under group insurance programmes offered by employers, said Goulet.

"Mental health is the leading cause of disability at Sun Life and in Canada in general," he said.

Nearly a third of all cases of disability are related to mental health issues. What's more, mental illness can also become a secondary effect of another illness. He gives the example of a patient who suffers from depression because of cancer. Taking these situations into account, almost two-thirds of disability cases are linked mainly or partly to mental health.

"The prevalence of mental illness is a generalized trend," said Goulet, "Young people, older people, wealthy people, less wealthy people, men, women: all the indicators are on the rise, regardless of the sub-populations we look at, whether geographical or other."

This increase occurred before COVID-19.

Because of this increase, Sun Life Canada had no choice but to raise premiums for its group insurance programs "in recent years."

"Because we had an increase, and we didn't expect it to return to normal, that it would continue like that. And that's exactly what happened," said Goulet.

DO YOU NEED HELP?

If you are in distress and looking for help, there are several resources available:

• Tel-Jeunes: 
• Suicide Action Montréal: 1 866 277-3553
• www.suicide.ca

This report by The Canadian Press was first published in French on Oct. 5, 2023.