Trebell v. Canada Life Assurance Company, 2026 ONCA 481
Reading time: 4 minutes (approx.)
By: Sarah Richard
The case began when Elizabeth Trebell applied for a life insurance policy with Canada Life. Before the policy was delivered, her health was alleged to have changed. Even so, Canada Life issued the policy and accepted premium payments for almost four years. After Ms. Trebell died, however, the insurer denied the beneficiary’s claim, arguing that the policy had never actually come into effect because her insurability had changed before the policy was delivered, in contravention of s. 180(1)(c) of the Insurance Act.
The motion judge disagreed with Canada Life. The judge found that because the policy had been in force for more than two years, the insurer could not rely on s. 180(1)(c) of the Insurance Act. In doing so, the motion judge expressed that the purpose of Section 180(1) was to provide certainty as to when the contract of insurance takes place. As such, he supported a ‘limited escape provision’ of 2 years to provide assurance to beneficiaries that coverage was, in fact, in place [para 21]. Therefore, based on the Act’s two-year incontestability rule, summary judgment was granted in favour of the beneficiary.
The Court of Appeal reached a different conclusion. Paciocco J.A. reviewed the history of Section 180(1) and found that its purpose was actually to “preserve the meeting of the minds relating to the essential terms that were agreed to” [para 47]. Key to this argument is that disclosure of a change is not in question but rather the material fact that a change occurred.
On this basis, the Court of Appeal held that s. 180(1)(c) creates a condition that must be met before a life insurance contract can come into existence and that the two-year incontestability rule only applies once a valid contract exists. The court also found that the policy’s own incontestability clause could not override this statutory requirement.
The Court of Appeal did not find whether Ms. Trebell’s health had actually changed enough to affect her insurability. Instead, it ruled only that Canada Life was entitled to make that argument. As a result, the summary judgment was set aside, and the case was sent back to determine whether there had been a material change in her insurability before the policy was delivered.
Overall, the decision clarifies that, in Ontario, an insurer can rely on s. 180(1)(c) to argue that a life insurance policy never came into effect, even if the policy was in place for more than two years and the insurer accepted premiums during that time. This means that the two-year incontestability period does not protect beneficiaries where the insurer’s position is that no valid insurance contract was ever formed.
Link: 2026 ONCA 481 (CanLII) | Trebell v. Canada Life Assurance Company | CanLII
