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Normandin Beaudry

Life insurance coverage that decrease with age


There, in black and white

NB Bulletin Vol. 4 N. 5, April 2001


An old complaint has resurfaced once again. In fact¸ there´s nothing new in the charge of discrimination in life insurance coverage offered under group insurance plans.

Ruth Margolis¸ a resident of British Columbia and spouse of a Canadian government employee who died in 1997 at the age of 69 two days before his retirement¸ had a surprise when she discovered she was only going to receive $37 200 in life insurance benefits for her spouse at the time of his death-instead of the $186 000 she would normally have received had he died 10 years earlier.

Like many plans¸ the group insurance plan offered to federal government employees provides for decreasing life insurance amounts starting at age 60¸ with the coverage ending at age 70.

The Federal Court of Canada recently ruled against the Government of Canada¸ establishing that the reduction in insurance amounts with age under the group insurance plan offered to its employees is discriminatory and a violation of the Canadian Charter of Human Rights and Freedoms. The judge based his decision mainly on the fact that historically the life insurance protection offered to government employees was designed and introduced to cover death-related expenses (medical¸ funeral and other) and that these expenses would not normally change with age.

Since the judge´s decision was based on the historical aspect of the plan¸ it is not clear whether this decision of the Federal Court applies to all other group insurance plans that provide decreasing life insurance amounts based on age.

The Department of Justice has already filed an appeal of the judgement of the Federal Court of Canada with the Federal Court of Appeal. Rest assured that we will be keeping a close eye on developments in this matter.


Please feel free to contact us for additional information.

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