Can You Change an Irrevocable Beneficiary in Ontario?

You named someone as an irrevocable beneficiary on your life insurance, and now your circumstances have changed. Perhaps a relationship has ended, or you want the money to go somewhere else. You want to know whether you can undo the choice.

The short answer is that an irrevocable designation is meant to be hard to undo. This article explains what that means, how to check whether your designation really is irrevocable, and what options exist with or without the beneficiary's help.

What an irrevocable designation does

Most beneficiary designations are revocable, which means the insured can alter or revoke them at any time by a declaration. An irrevocable designation is different. Once it is valid, the insured cannot change or revoke it while that beneficiary is living unless the beneficiary consents.

There are other effects as well. The insurance money is not under the insured's control, is not subject to the insured's creditors and is not part of the insured's estate.

First, check that it is truly irrevocable

A beneficiary can be named irrevocably only in the insurance contract itself, or in a declaration that is not part of a will. That declaration must be filed with the insurer at its head or principal office in Canada while the life insured is alive.

If someone tried to make a designation irrevocable in a will, or in a declaration that was not filed as required, it is treated as an ordinary designation and remains revocable. In that case you may be able to change it by a new declaration. Read the policy and any declarations you signed, and ask the insurer what it has on file.

Changing it with the beneficiary's consent

The most direct route is to ask the irrevocable beneficiary to consent. The insured may assign, surrender or otherwise deal with the policy where an irrevocable beneficiary has reached age 18 and consents.

Because the beneficiary is giving up a protected interest, they may want their own legal advice before signing. Ask the insurer what form of consent it requires.

If the beneficiary will not or cannot consent

Without consent, your options are narrow. The insured may still exercise any rights under the contract that are prescribed by Authority rule. Anyone who acquires an interest in the policy takes it subject to the irrevocable beneficiary's rights, unless a consent or court order provides otherwise.

If the irrevocable beneficiary is a minor or lacks capacity, the insured may apply to court for an order allowing them to deal with the policy without that beneficiary's consent. Whether a court would grant that order depends on the facts, so this is a point for a lawyer.

What to do next

• Get a copy of the policy and every beneficiary declaration you have signed.
• Ask the insurer how the designation was made and whether a declaration was filed.
• Find out whether the beneficiary is an adult, a minor or someone who lacks capacity.
• If the beneficiary is willing, ask the insurer what consent documents it needs.
• If consent is not possible, speak with a lawyer before taking any step affecting the policy.

Frequently asked questions