An individual who had been receiving long-term disability benefits after an illness had prevented continuation of the individual’s employment, brought an action when the insurance company ceased the benefit payments. The action was settled after the individual’s death by payment to the estate of long-term disability benefits that were unpaid during the individual's lifetime, and a survivor's benefit. CRA stated:
If … the survivor's benefit received by the individual's estate is one of the components of the long-term disability insurance plan, it is likely that this benefit would qualify as a "death benefit" … .
… A benefit received as a consequence of the death of a person qualifies as a death benefit if it can reasonably be regarded as being paid in recognition of services rendered by that person in connection with an office or employment.