Doctrine of unjust enrichment may deprive named beneficiaries of life insurance proceeds

Designated beneficiaries of a life insurance policy have traditionally been entitled to a high degree of certainty that they would be entitled to the policy proceeds upon the death of the insured. This certainty has been jeopardized in a recent Supreme Court of Canada (“SCC”) decision, Moore v Sweet, 2018 SCC 52.

The facts

Michelle Moore (“Michelle”) continued to pay the premiums of a life insurance policy on the death of her ex-husband (the “Policy”), Lawrence Moore (“Lawrence”), after the couple separated. This was in accordance with an oral agreement between Michelle and Lawrence. In exchange, Michelle would be entitled to the Policy proceeds upon Lawrence’s death.

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