December 9, 2021 – Life Insurance

“In Katz v. Katz, 2014 ONCA 606, 377 D.L.R. (4th) 264, the Court of Appeal canvassed the issue of life insurance securing support obligations and provided the following principles:

(a) The Divorce Act does not have a provision like s. 34(1)(k) of the Family Law Act, which permits a court to order a spouse to obtain insurance to secure payment of support following the payor’s death;

(b) Despite not having the specific provisions, the Court is given broad discretion to impose terms, conditions, and restrictions in connection with an order for child or spousal support, including the power to order a spouse to obtain insurance to secure the payment, to be binding on the payor’s estate; and

(c) The factors to be considered in determining the quantum of the life insurance, once the issue of insurability and cost of the insurance is resolved, are as follows: the amount of life insurance cannot exceed the amount of support payable over the duration of the support order; the amount of insurance to be maintained should decline over time as the amount of spousal support payable will diminish over the duration of the award; the obligation to maintain insurance should end when the support obligation ends; and the court should first order that the support obligation is binding on the payor’s estate.”

Kirvan v Kirvan, 2016 ONSC 7712 (CanLII) at 235