Your life insurance won’t necessarily end when you move outside of Canada. Some policies can be kept. However, each policy and insurance company is different, so you’ll want to know what happens with yours.
Living outside of Canada can complicate managing your policy, making payments and filing a claim. And, of course, tax and legal considerations come up when you or your beneficiary becomes a non-resident of Canada. We reviewed the federal life-insurance guide, Global Affairs Canada’s moving-abroad checklist, CRA’s non-resident life-policy disposition guidance, and the Government of Canada’s death-document guide.
We suggest contacting your insurance company about your policy before leaving Canada to get their response in writing.
Will Your Canadian Life Insurance Still Work If You Move Abroad?
In many cases, provided the conditions are met and premium payments are up to date, a Canadian life insurance policy can remain in force. However, it’s a good idea to get written confirmation from your insurer that your policy won’t be affected when you move.
Don’t assume a Canadian policy will remain available worldwide. Don’t cancel existing coverage until a new policy has been issued and is in force. Obtaining new life insurance may be limited by laws, life insurer licensing, your country of residence, your health, occupation and travel plans.
Your insurer can advise you on acceptable payment methods and the required identification, address and tax-residency documentation.
How Insurers View Residency vs Location
Your mailing address, physical location, and tax residence may not always match. The CRA looks at various factors and ties to determine your residential status for tax purposes.
Insurance contracts have their own residency definitions for administering coverage. An existing level-premium policy is administered under its terms and the facts disclosed when it was issued. However, when you apply for a new policy, increased benefits or an additional rider, the insurer may review your current residence, travel history or travel plans for underwriting and pricing.
How Insurers Verify Deaths Abroad
Generally, life insurers verify deaths abroad through a valid death certificate issued by the country where the death occurred. If the certificate is issued in a language not used by the insurance company, it may need to be translated into English or another language the company uses. Foreign documents may require translation, authentication or additional verification under the insurer’s claim process.
Read More: Learn How Life Insurance Payouts Work in Canada
Should You Buy a Policy in Your New Country?
| Option | May fit when | Main caution |
|---|---|---|
| Keep the Canadian policy | It may fit if your insurer confirms continuity and the policy meets your obligations. | Make sure you know how payment, customer service, making a claim, and tax issues would be dealt with from abroad. |
| Keep it and add local coverage | If you have obligations denominated in the foreign currency, it may fit. | Don’t create duplicate expenses unless there’s a specific need. |
| Replace it | It may fit if your Canadian policy is no longer adequate and appropriate coverage in your new country is approved. | If your age or state of health has changed, a replacement insurance policy could be more expensive or may not even be available. Never cancel your current insurance before finding a suitable policy in your new country. |
Read More: Read About Buying U.S. Life Insurance From Canada
Checklist: What to Do Before Leaving Canada
- Tell your insurer where you’re moving to, when, how long you’ll be away, your address and occupation. They may also want to know about any travel plans. Get confirmation in writing. Confirm continuity, premiums, accepted payment methods, currency, policy service and claims contacts.
- Make sure they know your beneficiaries. Confirm the names and contact info are correct.
- Review your will, estate plan and power of attorney, and make sure they’re up to date in Canada and your new country.
- Give your beneficiaries or someone else a copy of your insurance policies, including the policy number and where to report a claim, rather than assuming they can access your account when you’re not in Canada.
- If you have permanent insurance policies, talk to a tax professional who understands cross-border issues before making changes. Ask about taxation of cash value, policy loans or withdrawals, policy ownership changes, surrendering the policy, and any non-resident tax reporting requirements in Canada.
- If eligible, register with Registration of Canadians Abroad. Check for any other Canada-specific advice for your country.
Read More: See How Contingent Life Insurance Beneficiaries Work