Sun Life Canada President Pushes for Industry Changes in Suicide Clause Policies

“We work with the industry,” confirms the president of Sun Life Canada, Jacques Goulet, in an interview on the sidelines of a speech Thursday before the Chamber of Commerce of Metropolitan Montreal. It’s complicated for all the players to come to the same opinion. If it doesn’t move forward at the industry level, we will consider whether we move forward alone or not, but we would prefer to do that within the industry.”

The industry standard is to refuse to pay compensation when the insured commits suicide less than 24 months after signing their contract. In this case, the insurer would only reimburse the premiums paid.

This standard clause sometimes leads to heartbreaking situations, deplores Mr. Goulet. He recounts a “very recent” case that came to his office.

The young woman in question had signed a life insurance contract even though she had no known mental health issues. Subsequently, she becomes pregnant with a second child. After giving birth, she suffered postpartum depression which eventually led to suicide less than 24 months after signing the contract.

A young father, his partner was not entitled to the financial support provided for in the life insurance contract at a time of great vulnerability. “Following that, we decided to change things,” explains the businessman.

The issue is complex, Mr. Goulet explains. The 24-month clause aims to avoid cases of fraud where an insured person signs a contract knowing that he is thinking of committing the irreparable. In rare cases, it happens that a person ends their life due to a mental health problem that arises after signing the contract.

“In the case I described, it is absolutely clear that this is not a case of fraud. The lady, when she applied, was in full health. It’s clear that depression followed the birth. So, we have to find a way to differentiate and that’s why it’s not easy, but just because it’s not easy doesn’t mean it’s going to stop us from doing it.”

Discussions are “progressing well” with other insurers. Without naming them, Mr. Goulet said that the major Canadian insurers were all participating in the discussions. He does not want to commit to a timetable, but mentions the possibility of reaching an agreement in 2024. “There is a lot of actuarial work behind all that, risk assessment, etc.”

Mental health: increase in cases

Mental health problems have experienced a “structural” increase in Canada in light of claims from group insurance programs offered by employers, notes Mr. Goulet. “Mental health is the leading cause of disability at Sun Life and in Canada in general.”

Nearly a third of causes of disability are linked to a mental health issue. Additionally, mental illness can also become a side effect of another illness. He gives the example of a patient who is depressed due to cancer. Taking these situations into account, almost two-thirds of disability cases are linked mainly or in part to mental health.

The prevalence of mental illness is a general trend, says Mr. Goulet. “Young people, older people, wealthy people, less fortunate people, men, women: all indicators are on the rise, regardless of the subpopulations we look at, whether geographical, etc.”

The pandemic is not responsible for the increase in mental health problems observed by the insurer, the manager clarifies. “This increase occurred before COVID.”

Due to this increase, Sun Life Canada had no choice but to increase the premiums of its group insurance programs “in recent years”. “Because we had an increase and we didn’t expect that it would return to normal, that it would continue like that. This is indeed what happened.”

Need help?

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

– Tel-Jeunes: https://www.teljeunes.com/Accueil

– Suicide Action Montréal: 1 866 277-3553

– www.suicide.ca (amended)