Sun Life Financial
If you held a life insurance policy during the 1980s or 1990s, you may be part of a major financial resolution decades in the making.
Sun Life Financial Inc. recently announced a settlement in principle to resolve a long-running class action lawsuit involving hundreds of thousands of individual life insurance policies. The proposed deal, which is still awaiting court approval, could see up to $213.5 million distributed to eligible policyholders across the country.
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Origins of the dispute
The legal battle didn’t start with Sun Life products. Instead, it centres on “legacy” policies originally issued by Metropolitan Life Insurance Company (MetLife) before Sun Life acquired the business. Between 1987 and 1998, MetLife sold universal life insurance products known as Universal Plus, Flexiplus and Optimet.
When interest rates were high in the 1980s, these policies were marketed as efficient investment vehicles. However, as interest rates fell in the following decades, the costs associated with the policies rose while the returns often underperformed. The class action, which officially began in 2010, alleged that the insurer breached contract terms by increasing the cost of insurance and administrative fees based on factors not permitted by the original agreements.
The lawsuit also initially included claims of misrepresentation by sales agents. However, Canadian courts eventually ruled that those specific claims were too “idiosyncratic” to be handled as a group, meaning individuals would have to pursue misrepresentation claims on their own. The current settlement focuses on the interpretation of policy language and the administration of fees.
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Checking your eligibility
The settlement is designed to provide “finality to a long-standing legal dispute and provide certainty for affected policyholders,” according to a May 2026 report from Insurance Business (1).
You may be eligible to participate if you bought a Universal Plus, Flexiplus or Optimet policy between 1987 and 1998. The class includes residents from all Canadian provinces. Because Sun Life inherited these policies through its 2002 acquisition of Clarica Life Insurance Co., many current Sun Life clients may not even realize their original policy started with MetLife.
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What happens next
Sun Life has emphasized that this settlement does not involve any products it designed or sold under its own brand. In a press release issued through Canada Newswire (2), the company stated: “This matter does not involve any policies or products sold by Sun Life.”
While the $213.5-million figure is the maximum settlement value, the exact amount each member receives has not yet been determined. The “liability or damages have not yet been determined, as there are many factors that will establish its outcome,” according to details shared by CP24 (3).
If you believe you are a class member, the next step is to wait for the formal court approval of the settlement and the subsequent notice process. Sun Life expects to record an after-tax charge of approximately $145 million in its first-quarter 2026 earnings to account for the deal.
The company also plans to seek reimbursement for the costs. According to Sun Life, “MetLife provided an indemnity relating to these policies. Accordingly, if the settlement is approved by the court, Sun Life will seek full recourse from MetLife pursuant to the indemnity.”
For those who still hold these legacy policies, keeping updated records of original contract dates and policy names is the best way to ensure you are ready when the claim period opens. Additional information and updates are typically posted at sunlifeclassaction.com as the court process moves forward.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Insurance Business (1); Canada Newswire (2); CP24 (3)
This article originally appeared on Money.ca under the title: Sun Life’s $213.5 million class action settlement: Are you eligible for a payout?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
