Oct 30, 2026
An old life insurance policy tucked away in a filing cabinet could be worth a cheque. If you hold one of three universal life policies sold by Metropolitan Life Insurance Co. (MetLife), a New York-based insurer, that was purchased between 1987 and 1998, then a court-approved settlement may mean you are owed money.
Ontario Superior Court Justice Janet Leiper has signed off on a $213.5-million class-action settlement over how Sun Life, the Toronto-based insurer, handled those policies. Around 70,000 current and former policyholders across Canada stand to benefit from the ruling.
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But the payment isn’t automatic for everyone. To get the funds, former policyholders and representatives of estates for those who have died will need to apply, and any money left unclaimed goes back to the insurer.
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What was the Sun Life class action about?
The case, Fehr et al. v. Sun Life Assurance Company of Canada, began in 2010 and concerns three universal life policies originally sold by MetLife: Universal Plus, Flexiplus and OptiMet.
According to the court’s decision, policyholders alleged that Sun Life breached the terms of the policies by raising cost of insurance (COI) rates and administrative fees based on “impermissible factors.” A second claim argued that holders of pre-1992 Universal Plus policies were charged more than the “Maximum Premium” listed in their contracts.
Sun Life denies wrongdoing. In an April 30 statement, Sun Life said it inherited the policies through past Canadian acquisitions and didn’t sell them. The company said it would seek full recovery from MetLife under an indemnity if the settlement was approved. The Ontario Superior Court of Justice approved the deal on Sept. 8, 2026, and the settlement took effect Oct. 8, 2026.
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Who qualifies for a payment?
The settlement includes $142.5 million in cash and $71 million in future rate protections. Roughly 33,000 current and 27,900 former Flexiplus holders will benefit, along with 7,500 current and 1,000 former Universal Plus holders.
Flexiplus holders are eligible for cash if they paid COI or administrative fee increases. Universal Plus holders qualify if they bought their policy before 1992 and paid COI charges above the Maximum Premium.
Despite the favourable ruling, policyholders shouldn’t expect a full refund. Eligible Flexiplus holders will receive a gross recovery of 37% to 42% of the alleged COI overcharges and 20% to 39% of the alleged excess fees. Eligible holders of pre-1992 Universal Plus policies will receive a gross recovery of 36% to 40% of the COI charges they paid above the Maximum Premium.
In other words, these figures are a share of what was allegedly overcharged, not a dollar-for-dollar refund.
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And then there are the legal costs — expenses that also come out of the overall $213.5-million settlement. According to documents, the court approved class counsel fees of about $63.3 million plus harmonized sales tax (HST), along with roughly $2.4 million in disbursements and honoraria of $25,000 for each of the policyholders who led the case.
Who doesn’t qualify for a payment?
Some policyholders won’t receive anything. OptiMet owners are excluded because their cost of insurance never rose beyond what their policies set out.
Owners of Universal Plus policies from the 1992, 1994 and 1998 series are also excluded, because the court found that the wording in those later policies changed what Maximum Premium meant.
Anyone who previously signed a release is ineligible as well, including people who joined Sun Life’s 2010 Flexiplus Options Program.
People who still hold a policy get a second benefit. Flexiplus COI rates and fees are permanently frozen, while pre-1992 Universal Plus COI charges are capped at 3.15x the base Maximum Premium.
Do you have to file a claim?
It depends on whether you held the policy as of March 31, 2026.
Current policyholders
Eligible current holders will receive a cheque in the mail — no application required. If that cheque goes uncashed or can’t be delivered, Sun Life will deposit the money into the policy’s accumulation fund.
Former policyholders and estates
Former owners and estate trustees must apply to the claims administrator. The deadline will be at least 12 months after the claims period opens. If your name appears on Sun Life’s approved list, you won’t need to submit any supporting documents. An online database will let you confirm whether you’re on that list.
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If you believe you qualify but were left off, you can file a disputed eligibility form with supporting paperwork.
Any unclaimed cash returns to Sun Life.
Why do older universal life policies get more expensive?
With universal life insurance, the premium you pay and the cost of insurance are separate numbers. The COI rises as you age, and once it outpaces your premium, the policy starts drawing down its own savings. Some increases are built into the contract as you age; the lawsuit alleged Sun Life went further, raising rates based on factors the policies didn’t allow.
Quebec’s Autorité des marchés financiers (AMF), the province’s financial regulator, created a hypothetical scenario to illustrate how age-based increases add up. A 54-year-old man paid $600 a year on a $100,000 policy. At 68, his savings were gone, he owed $503 and his COI for the next year was set at $1,384.
The judge noted that many class members are aging, rely on fixed incomes and may no longer be insurable. In the only objection filed, two Ottawa policyholders wrote to the court that they feared rising charges would force them to let their policy lapse “after 37 years of payments.”
What to do next
If you think you or a family member held a Flexiplus or Universal Plus policy, check your old policy documents for the product name and the original issuer, MetLife. Estate trustees should look through the deceased’s papers.
Current policyholders don’t need to do anything; eligible holders will be paid automatically. Former policyholders and estates will need to apply once the claims period opens.
To check your eligibility or get updates, contact the claims administrator, CA2 Inc., at 1-800-538-0009 or [email protected]. You can also email class counsel at [email protected] or visit sunlifeclassaction.com.
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Writer and editor based in Toronto with experience in personal finance, insurance, arts and culture and branded content.
