If you and your partner have shared a home, finances, and a life together for years without ever signing a marriage certificate, you already know that "common-law" can feel like a second-class label in Canada. The truth is more nuanced. For some legal purposes your relationship is treated exactly like marriage. For others, including parts of life insurance and estate planning, it absolutely is not. And that gap is where many common-law seniors get caught off guard, often at the worst possible moment.
This guide walks you through how life insurance actually works for common-law partners in Canada, what protections kick in automatically, what you have to set up yourself, and the small paperwork steps that can prevent a surviving partner from losing tens of thousands of dollars.
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What "Common-Law" Actually Means for Insurance Purposes
Insurance companies in Canada are reasonably consistent about who counts as a common-law spouse, but the rules are not identical across the country. Most insurers use one of two thresholds. The first is a cohabitation period, usually 12 months of continuous living together in a conjugal relationship. The second is shared parentage, meaning you have a child together by birth or adoption regardless of how long you have lived together.
If you meet either test, almost every Canadian life insurer will treat your partner as eligible to be a beneficiary, eligible for spousal coverage on a joint policy, and recognized for the purposes of insurable interest — the legal requirement that the person buying coverage has a real financial stake in the insured person's life. A common-law spouse always has insurable interest in their partner.
Where Provincial Rules Diverge
Federally, the Income Tax Act treats common-law partners the same as married spouses after 12 months of cohabitation. Provincial family law is messier. Most provinces recognize common-law relationships for some purposes, but the duration required and the rights granted vary. Quebec is the outlier — its civil code does not give common-law partners the same property rights as married couples, which is one of many reasons senior-plans.ca does not serve Quebec residents. For a deeper look, see our guide on the Quebec life insurance exclusion.
For the rest of Canada, your life insurance policy is governed by your contract and your beneficiary designation, not your provincial relationship status. That is good news, because it means you control the outcome.
The Beneficiary Designation Is Everything
If there is one section of this article you remember, make it this one. A life insurance payout does not follow your will. It does not follow your marriage status. It follows the name on the beneficiary form. Full stop.
This is true for married couples too, but the stakes are higher for common-law partners because you do not have the automatic legal backstop that some provinces extend to legally married spouses. If you forget to name your partner, or you name an ex-spouse from a previous marriage and never update it, your partner has almost no recourse when you die.
Naming Your Partner Properly
When you fill out the beneficiary form, use your partner's full legal name, their date of birth, and their relationship to you. Write "common-law spouse" or "common-law partner" — not "friend," not "roommate," not just their first name. You should also name a contingent beneficiary, which is the backup person who receives the payout if your primary beneficiary dies before you do or at the same time as you. Our walkthrough on naming a life insurance beneficiary in Canada covers the common mistakes in detail, including why "estate" is almost always the wrong answer for common-law couples.
Why Naming Your Partner Directly Beats Naming Your Estate
Some people instinctively name their estate as beneficiary, thinking the will handles the rest. For common-law partners this is usually a bad idea.
When a life insurance payout goes to a named individual, it bypasses probate entirely. The money arrives within two to four weeks of the claim, tax-free, directly to your partner. When it goes to your estate, three things happen. It becomes part of the probate process, which can take six to eighteen months. It becomes subject to provincial probate fees, which run roughly 1 to 1.5 percent of estate value in most provinces. And it becomes available to your creditors before your partner sees a dollar. For more, see our article on probate and life insurance in Canada.
Compare your options before you decide.
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Special Situations Common-Law Seniors Run Into
Real life is rarely tidy. Most common-law seniors over 60 are not in their first relationship, and that creates wrinkles worth thinking through.
You Still Have a Legally Married Spouse Somewhere
This happens more often than you might guess. People separate, move on, build a new common-law life, and never formally divorce. If you are technically still married to someone else, your common-law partner may face a legal challenge from the legal spouse at claim time — especially if you forgot to update the beneficiary on an older policy. Pull every life insurance policy you own (employer group, individual, mortgage, credit card) and check who is named. If your ex is still listed, fix it today.
Adult Children from a Previous Relationship
Your kids may believe they should inherit. Your partner needs the money to live on. The beneficiary form is how you settle that argument before it starts. Some couples split the proceeds — for example, 70 percent to the partner and 10 percent to each of three adult children. Others fund a separate, smaller policy specifically for the children. Our guide on life insurance for blended families walks through the most common arrangements.
A Mortgage in One Name Only
Many common-law couples have a mortgage registered to just one partner. If the mortgage-holder dies and there is no life insurance to cover the balance, the surviving partner can be forced to sell the home. Mortgage life insurance from the lender is one option, but a personal term policy usually offers better value. Compare both in our breakdown of mortgage life insurance vs term life.
Joint Policies vs Two Individual Policies
A joint first-to-die policy pays out when the first partner dies, then ends. It is generally about 10 to 15 percent cheaper than two equivalent individual policies, which makes it attractive if budget is tight. The trade-off is that the surviving partner is left without coverage and has to qualify all over again — at an older age, with whatever health changes have happened in the meantime.
Two individual policies cost more upfront but leave the survivor with their own coverage intact. For most common-law seniors planning final expenses or leaving a small legacy, two individual final expense policies in the $15,000 to $25,000 range tend to be the simpler choice. Premiums in that range typically run $30 to $80 per month per person depending on age and health. Our article on joint life insurance for senior couples covers the math in more detail.
Still in the research phase? Our complete guide to life insurance for Canadian seniors walks through all the major product types in plain English.
Frequently Asked Questions
How long do we have to live together before insurers treat us as common-law?
Most Canadian insurers use 12 months of continuous cohabitation, or any duration if you share a child. A few specialty insurers go as low as six months. Federal tax law uses 12 months. If you are close to the threshold, ask the insurer directly — they will tell you exactly what they need.
Will my partner have to pay tax on the life insurance payout?
No. Life insurance death benefits paid to a named beneficiary are tax-free in Canada, regardless of marital status. Common-law partners receive the proceeds the same way a married spouse would. Our article on life insurance payouts and taxes in Canada covers the few situations where tax can come into play.
Can my common-law partner be denied because we are not legally married?
No insurer in Canada (outside Quebec's specific civil code rules) can deny a claim solely because the beneficiary is a common-law rather than legal spouse, provided the beneficiary designation is valid.
What if my partner has a serious health condition? Can we still get coverage?
Yes, in most cases. Guaranteed-issue policies accept applicants regardless of health, and simplified-issue policies ask only a handful of questions. Our comparison of guaranteed issue vs simplified issue final expense insurance explains which option fits which situation.
Do we need a lawyer to set this up?
For the life insurance itself, no. A standard application and beneficiary form is all you need. A lawyer becomes useful when layering life insurance into a broader estate plan, especially with blended families. Our estate planning with life insurance guide covers when professional help is worth the cost.
Get a Free Quote
If you are a common-law couple in Canada and want to make sure your partner is properly protected, the first step is seeing what coverage actually costs at your age and health. A quote takes about 60 seconds, requires no medical exam, and gives you a real number to plan around. Start your quote at senior-plans.ca — coverage is available to Canadians aged 18 to 80 outside Quebec.
