LAWYER'S SECTION

REFUND OF SINGLE PREMIUM

Typically a life insurance company will refund the single premium deposited without interest in cases where the settlement is not finalized for bona fide reasons. A bona fide reason includes any reason out of the control of one of the two parties such as the failure to obtain a favorable advance tax ruling from CCRA (Revenue Canada) – which is rarely needed these days - or the failure to obtain Public Trustee approval or Court approval.

However, in a situation where it is established that one of the two parties (usually the plaintiff) has a change of mind and wishes to select a different arrangement, the life insurance company reserves the right to apply a market value adjustment to the amount refunded.

Any situation where the necessary legal documentation is not finalized has to be examined individually.