Home Breadcrumb caret Tax Breadcrumb caret Estate Planning Breadcrumb caret Insurance Breadcrumb caret Life Handling life insurance proceeds Advisors often recommend life insurance based on the fact that it’s easy for heirs to collect policy benefits. But executors, known as estate trustees in Ontario, still need to know how the process works, and potential pitfalls that can happen along the way. By James Dolan | September 5, 2014 | Last updated on September 5, 2014 3 min read Large policy Most insurance companies will take longer and require additional documentation before paying out more than $1 million. Recent policy If the policyholder’s death occurs within two years of purchase, the insurance company will likely check if there was full disclosure of previous medical conditions. If there wasn’t full disclosure, the insurer could limit payout to return of premium plus interest. Undue influence or infirmity If the policyholder was known (or alleged) to be mentally infirm or unduly influenced when beneficiaries were named, the executor should ask a judge to assess the policyholder’s mental competency. Unusual designations Designations to strange or unexpected beneficiaries—a pet; an unknown friend; an obscure charity—may require extra due diligence from the executor. James Dolan is a Vancouver-based financial writer. James Dolan Save Stroke 1 Print Group 8 Share LI logo Large policy Most insurance companies will take longer and require additional documentation before paying out more than $1 million. Recent policy If the policyholder’s death occurs within two years of purchase, the insurance company will likely check if there was full disclosure of previous medical conditions. If there wasn’t full disclosure, the insurer could limit payout to return of premium plus interest. Undue influence or infirmity If the policyholder was known (or alleged) to be mentally infirm or unduly influenced when beneficiaries were named, the executor should ask a judge to assess the policyholder’s mental competency. Unusual designations Designations to strange or unexpected beneficiaries—a pet; an unknown friend; an obscure charity—may require extra due diligence from the executor. James Dolan is a Vancouver-based financial writer.