Don’t buy insurance from banks

April 1 2009 by Ellen Roseman

Banks love to sell insurance as an add-on to an existing product.

Sign a mortgage and they wil ask you about getting life insurance and critical illness insurance at the same time. Just a small increase in your monthly payments.

Take out a credit card and they will try to sell you insurance to protect you if you can’t make the minimum monthly payments. Often, they give it free for a few months and give you the option of cancelling afterward.

Many people don’t know they have credit balance insurance, since they don’t believe banks use negative option marketing. The information about having to cancel the insurance to stop it is slipped into a package you get along with the card.

Sometimes, borrowers feel they have to buy the insurance or lose the loan. The banks make you sign a waiver form, saying you’re on your own if you get sick or die. Now that’s pressure.

What you may not realize is that banks do “post-claims underwriting.” This means they don’t check your medical history in advance. They just ask you a few questions and then decide, based on your answer, whether or not you qualify for insurance.

Only when you or your loved ones make a claim under the insurance do they contact your doctors and start checking into your medical history. Then, they may decide you don’t qualify for coverage — and in fact, you may never have qualified — despite having paid premiums for all these years.

If you don’t believe me, check the column I did about a couple in this unfortunate position.

Luckily, I helped them get the coverage they thought they had. But the bank insisted they were at fault for misrepresentation on their application.

I know that if you buy insurance from a qualified insurance agent or broker, the proper checks will be done long before you have to make a claim and face possible denial for being ineligible.


  1. DK

    Apr 1 2009

    Read your story on the Feldmans. Thought I could give you another good story about our beloved banks and their insurance companies.

    In September 2003, my wife was taken to hospital, where it was discovered she had a malignant mass in her stomach. That’s fine, she dealt with it and had two thirds of her stomach removed.

    She was sent home and had a great recovery, experienced some discomfort with adapting to food and diet. But all in all, recovered well.

    Well enough that after two and half years being cancer free, she decided that she would like to own and operate a small discount store. It was always a dream of hers.

    Since there was no indication of any other medical problems, she took out a loan of $35,000. So off we went to the TD Bank, the bank we have being using for the past 20 years. Where she knew them and they knew her and our kids and they also had knowledge of her past battle with cancer.

    They arranged a loan and insurance. I sat there with her as they went through the forms and she answered their questions, honestly. This is where we read and signed the insurance forms with a TD manager with us.

    So she started her business and things were going fine until the fall of 2006, when she was again diagnosed with cancer, but this time in her lungs, and given two years to live. She took it like a trouper and instead of crying about her future, she was determined to leave her mark by operating a successful business.

    But as her health was failed, so did her business. We were unable to do anything to turn around both scenarios.

    In February 2008, the store was closed and everything liquidated for practically nothing. She felt bad for what had happened, but was relieved to know that the loan was insured and that she indeed would be able to help pay back the money that she had borrowed.

    Well, she passed away in June 2008. I still continue to pay her loan payments, which were supposed to be insured.

    Yeah, right. They said if they knew her previous medical history, they would not have given her the loan. Well, what do they think we would have done? If we knew she was going to die, would we have opened up a discount store?

    People at the bank wash their hands of any wrongdoing. The insurance company says see you in court.

    What small town guy like me has the money to fight the TD Bank in court? Who can afford the lawyers? Who can afford to lose?

    They Can. I Can’t.

    They got you and they know they got you. Do I jeopardize my retirement and end up with nothing? They don’t care.

    You know the funny thing is that they paid off the remaining balance of our current house ($7,000) on a policy that was renewed only three months prior to her death.

  2. LY

    Apr 1 2009

    Just wondering if you’d like to know a few details about two things we experienced recently:

    1) I applied for and received a new Visa card and discovered I was enrolled in their 3rd party insurance program. To unenroll, I had to phone a number to decline, and found out the insurance company was already given my file as a “customer”, complete with date of birth.

    2) We renegotiated our mortgage, checked off box to decline mortgage insurance (very expensive) and found they enrolled us anyway. Also, mortgage was $20 higher per month than what we agreed to. Bank manager told us “it’s better for you”. But nonetheless, it was not the agreement we signed.

  3. KS

    Apr 1 2009

    I have a PC Financial MasterCard and asked for balance protection to be cancelled on March 1, 2008, in writing via their website. They didn’t respond and continued billing me a few cents or dollars a month.

    I recently did my taxes and while looking at 2008 expenses, realised I have paid about $325 over the past year for this service. I wrote to them again and asked for them to refund what they had charged.

    I got a call from them, saying they cannot return my money as I should have called and asked for the service to be cancelled and not written to them.

    They have promised to look into why they didn’t tell me this last year, but have confirmed that whatever the reason for their failure to respond to my initial email, they will not refund the money.

    Is this something you can help with? I know I should have checked my statements, but their attitude seems a bit odd given that I did the right thing and wrote in a request that they failed to act upon. I have copies of all correspondence.


    From Karren King, PC Financial ombudsman:

    Good day,

    I am writing in regards to the difficulties you have experienced with the President’s Choice Financial MasterCard Customer Contact Centre.

    First and foremost, on behalf of President’s Choice Financial, I would like to apologize for any inconvenience and frustration this experience has caused you.

    Our investigation confirmed that you did in fact send in an email request to cancel your Account Balance Protection (ABP) plan.

    Unfortunately, the plan was not cancelled at the time of your request.

    There is no question that the matter was not handled according to our normal standards, as we work very hard to train our staff to deliver the kind of experience customers expect from President’s Choice.

    In response, we have credited your account $327.11 for the 12 months of ABP premiums and we have also applied a $65 interest adjustment.

    As a gesture of our appreciation for your patience throughout this matter, we have also awarded you 25,000 PC points.

    While it is unfortunately too late for us to go back and change your particular experience, I would like to assure you that the details of your case have been reviewed with the appropriate individuals, in an effort to prevent similar occurrences in the future.

    Please do not hesitate to contact me should you have any further concerns.

  4. HS

    Apr 2 2009

    When we purchased our current home, we were advised that we would have to start a new mortgage life policy, because the one for our old home couldn’t be transferred or continued.

    What was incredibly surprising, though, was the wording on the new application.

    I’m sure that you’ve seen many applications with a question like, “Have you ever had diabetes, high blood pressure, heart disease, kidney disease etc.”, right?

    Well, what was surprising about this new application was that instead of the above, it asked, “Have you ever been TESTED for those above ailments?”!

    I don’t think I know of a single adult who has not been tested for high blood pressure by having their doctor put a cuff on their arm and take a reading. I don’t think I know of any adult who hasn’t had bloodwork that included a glucose level or kidney function component.

    When I pointed this out to the branch manager (we’d had difficulties dealing with a couple of poorly informed underlings and had to eventually deal with the branch manager), she told me that, “They don’t really mean to ask if you’ve been tested. They only want to know if you have those diseases.”

    Of course, I refused the coverage, because our mortgage was almost paid off by this point and I didn’t want the hassle of having to respond to further questions by the insurer, which would surely follow a “YES” answer on the application form.

    I’m writing to bring this to your attention, because I’m sure that most people don’t read the fine print like I (always) do, and may be causing their policies to become null and void down the road, should they want to make a claim.

    I read your column every week and always enjoy your topics.

  5. JK

    Apr 2 2009

    I have a CIBC Aerogold Visa card with credit balance insurance. I do carry a very large balance on this card and have never thought twice about the insurance I was paying.

    After careful consideration, I decided to cancel the credit balance insurance – a big risk, but necessary, in order to pay off the card.

    I called the insurance company yesterday – Canada Premier Insurance. I spoke to a rep and told her that I wanted to cancel the insurance, which is 89 cents for every $100 in outstanding debt. An amount I never thought twice about and I assumed was pretty standard with most cards.

    Well, of course, she was trying to retain me as a client – and offered the insurance at 30 cents for every $100 in outstanding debt!

    I was astounded – speechless, that essentially I and the majority of consumers are being “robbed blind”!

    Though the offer seemed tempting, I decided to cancel it anyway. Most likely, I would still be over paying for the insurance at this discounted rate.

    Could this be an issue worth investigating?

  6. MS

    Apr 2 2009

    I just was approved for a mortgage and offered the same insurance for my mortgage. I declined.

    This type of insurance is a fraud. It is in the industry called “post-claim underwriting.”

    In legal terms, the only thing you are “qualified” for is to pay the monthly premium. You are not “approved” because you pay the premiums.

    Your claim approval is only reviewed at the time of death or other life threatening change. Most customers think they are covered when in legal terms they are not.

    This form of insurance is banned in the USA and some Canadian provinces. This is not like other insurance products such as house and car, where you are approved or declined based on risks. Your premiums indicate approval and coverage.

    Not so in mortgage insurance. You are not legally entitled to anything until such time a claim is made. That is the danger. Read the fine print in the CIBC form:

    “In the last 24 months, have you received any medical treatment advice or tests, or follow ups?”

    So if you have been to a doctor for ANY reason in the last 24 months, you must answer yes. Having a blood pressure cuff on is, in fact, a test. Most people would not connect that meaning.

    Who would ever answer yes to that above question? And to add more issues, banks are not legally licensed to sell it. That is why it is underwritten by a third party, which will at the time of death start the process.

    Again, answering NO to that above question will in itself disqualify you if you have seen your doctor for even a physical, that is, a “test.”

    What customers should do is get life insurance with a real medical. You are qualified at the time of application with the real peace of mind.

  7. DZ

    Apr 2 2009

    Life insurance is always underwritten at the time of application.

    Insurance that is underwritten at the time of claim qualifies as ‘Lotto’ insurance, where the house always wins.

    This is akin to the credit default swaps in the US, which were sold as ‘insurance’ without the regulatory reserves necessary (they were deliberately designed not to fall under the insurance regulatory regime) and which could not be used to fulfil the insurance obligations they carried.

    Clearly, the public is unaware. Your article helps bring this to light.

  8. Brian Poncelet,CFP

    Apr 14 2009


    Another reason to get your own policy is that someone’s health may not be perfect (overweight, high blood pressure, etc.).
    By getting a policy that may be rated (priced higher), you can get the coverage that cannot be offered by the banks on the one page questionnaire.

    If your health gets worse, you could “convert” the term policy to permanent coverage without any medical. The key is to get a policy you can convert if you are looking at a short term coverage only.

    A great site to check out is Assuris is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should fail.

  9. PS

    Apr 20 2009

    My parents have been long-term Scotiabank customers. On their last mortgage renewal, the banking officer suggested to consolidate the mortgage and line of credit; both of them were life insured.

    My father died Aug. 29, 2008 of lung cancer, 18 months after renewal. He was healthy up to this point.

    I believe Scotiabank paid out the line of credit, denied the claim against the mortgage due to non-disclosure [I do not know if he disclosed that he was taking hypertension medication] and credited a portion of the premiums back.

    Any rational individual can tell that lung cancer, which spread into the lymph nodes, has nothing to with blood-pressure medication.

    Yet, the bank and insurance companies are in each other’s pocket, willing to take your money and finding excuses not to pay on the policy.

    This entire situation has left my Mom with a financial burden and additional stress.

    Prior to my father’s death, he told me that the house is covered and there was nothing to worry about.

    In my opinion, the Banking Industry should be providing any type of Insurance.

  10. cecile

    Apr 29 2009

    I worked for a major bank for many years, a lot of it in mortgages. What people do not understand is the mortgage insurance is paid out on a declining balance. An example is say your mortgage is $200,000. You pay it for 2 years and the balance is $180,000. Say you pass on. The insurance company will only pay out $180,000-not the $200,000. And amazing enough, even though the mortgage balance is declining, the insurance premium is still charged on the original $200,000, not matter how long the mortgage lasts. Best to get term insurance which will pay out the face amount. As well you are approved right away-not when you need it, like the bank insurance companies.

  11. EA

    May 12 2009

    I hope you investigate Canadian Tire Bank and their affiliate, the American Assurance Co. They were charging my stepfather $110 per month for insurance that he was not eligible to collect.

    The life insurance part expires at 65. They were well aware that he is 76.

    The employment benefits for being unable to work were denied because he was not employed. He has not worked since he was 60.

    He has been diagnosed with dementia and is currently in a nursing home.

    He went through a lot of money the year before the diagnosis. Last March after he went into the hospital, I set about trying to get his financial affairs in order for him and my mother.

    I mortgaged the house and paid off all his debts, except for Canadian Tire.

    I put in a claim to American Assurance to pay his Canadian Tire account and I was repeatedly denied.

    I asked them to return the money they and Canadian Tire had collected, since he was, according to them, ineligible for any of the coverage.

    They denied this, saying that they were providing coverage for accidental insurance — $110 per month for making a minimum payment on a $9,000 balance is pretty extreme.

    When I said that his dementia could be a result of age or an accidental fall and hit to the head, they again denied the claim.

    I have discussed this matter with various people at American Assurance and Canadian Tire and said we would pay off the account — minus the money and interest paid to the insurance company.

    They, in turn, continued to charge interest and insurance premiums for two months, pushing his account $400 over its limit. You cannot get $5 worth of gas if you are at your C.T. limit. But they can help the American scam company collect an additional $220 for uncovered benefits.

    They have continually harassed my 76 year old mother with phone calls and letters. (She has power of attiorney.)

    Now they’re turning it over to a lawyer who has threatened to take her house. His name is Joel Miskin. Please look into this fiasco, as I am sure you will find this is happening to a lot of senior citizens.


    Ellen, collections have ceased on the account. I will be back in touch tomorrow.

    Lisa Gibson
    Associate Vice President,
    Media and Public Relations,
    Canadian Tire

    Ellen, I wanted to ensure you were aware that we have resolved things with Mr. A. We have sent him a letter via courier confirming the arrangements that both parties have agreed upon.


    Hi Ellen,

    We have resolved our dispute with Canadian Tire, thanks to you. We will be paying off the remaining balance next week.

    We were given what we asked for, all monies refunded plus interest. The total was $5,232.72.

    Canadian Tire said the credit balance insurance was not sold inappropriately.

    “Although we don’t believe there is any entitlement to a reimbursement of premiums, given the unique circumstances in this case, we would like to extend a gesture of goodwill,” its letter said.

    They continue to rip off people, especially the elderly and vulnerable.

    I was told that many people elect to continue with the coverage after they are 65. This means getting 20 per cent of the coverage at the same premium. Who wouldn’t line up for that?

    Thanks ever so much for your help and prompt attention to this matter.

    It is greatly appreciated. I will certainly pass your name on to anyone I come across who has been similarly victimized. Keep up the great work.

  12. ML

    May 22 2009

    Sorry to rain on what appears to be a slam on the Big banks, but funny how the big insurance companies come away unscathed by all this chatter! Even though they underwrite their policies up front, they don’t simply honour their claims.

    According to Canadian industry statistics, only 75% of Life Insurance policies are accepted at standard rates by insurers and only 97% of claims are honoured.

    On the Critical Illness side of things, only 85% of claims are paid.

    The banks may not be perfect, but I think they provide a valuable service and regardless of what you think, a recent actuarial study out of Toronto said that they pay 95% of their claims and accept over 90% of applicants (15% after underwriting).

  13. Florence Roden

    May 26 2009

    I have been paying premiums on a mortgage life insurance policy since November 2003. When I filled out the application with my banker, I stated that I was a smoker and in business for myself. My premium was to be $283.33 per month.

    My banker advised that I may not qualify for the wage-loss provisions of the policy or for the critical illness provision. If so, my premium would be reduced accordingly.

    I signed a form for automatic withdrawal of the premiums from my bank account and when they started taking the premiums, they only took $147.98.

    Due to my current business situation, I called Cumis and reqested that they cancel my policy. I was informed that I was paying for wage-loss benefits that I would never be entitled to and therefore they would reimburse me for those premiums going back to 2003. They also convinced me to stay with the policy, as it included the critical illness provision that could come in very handy.

    I had assumed that because the premium was reduced, I wasn’t covered for these provisions and said so, but the woman advised me that I was covered.

    A couple of days later, and intermittently over the next two weeks, I got a calls from a supervisor. She started out asking me if was a smoker in 2003, a question I did not answer. Instead, I asked her if she had my application. Did it not state that I was a smoker?

    She advised me that I was at fault for not having paid the proper premium and they would want me to make up the premiums.

    I said that I had signed the automatic withdrawal card and THEY were the ones who were at fault. I told her that had the premium been $283.33, I would have cancelled years ago.

    I then asked her if I would have been covered had I died or become critically ill. She told me that I would DEFINITELY NOT have been covered.

    I told her that if I wasn’t covered, I wanted the return of my premiums because they were taking my money fraudulently and leading me to believe that I was fully covered. She asked me if I wanted to cancel the policy and said if I was willing to cancel the policy, they would reimburse me all of my premiums going back to November 2003.

    Today, I got a call from James from Cumis’ Vancouver office, stating that they will reimburse me for the wage-loss portion of my premium, but not for the rest. He stated that had I died, my family would have had to come up with the remainder of the premiums before they would pay out anything.

    Where do I stand and what can I do?

  14. GW

    May 29 2009

    I read your column about the Credit Protector Plans that credit card companies offer.

    I was very annoyed in the past couple of weeks when I needed to call two credit card companies to activate new credit cards.

    Both times, I was transferred to an agent where they were trying to sell me the plan.

    They were very insistent and did not want to accept my response of no interest in the product.

    The script was almost identical for each company I called, Sears and CIBC.

    The only reason I needed to activate the new cards was because the strip was not working on one card and the other was because of new chip technology. I had no choice but to call the number provided.

    When I spoke to the CIBC person, I told them that I didn’t appreciate having to field a sales pitch just to activate my credit card.

    I think this is abusive. Is there a governing body that this kind of abuse can be reported to?

  15. RS

    Jun 11 2009

    In 2002, my father applied for a 5-year mortgage, as well as mortgage life insurance. He was 60 years old.

    The application for mortgage life insurance specified that approval would be granted only to applicants below 65 years of age. Qualifying for both, he was approved.

    In 2007, at age 65, the mortgage and mortgage life insurance were renewed for another 5-year term. He was informed that he was covered up to the maximum insurable age of 70. New applicants would only qualify if they were less than 65 years of age.

    After qualifying, the maximum age of coverage was 70 years. This was the case in this situation.

    Mortgage and life insurance renewal were subsequently approved. Monthly withdrawals for mortgage and life insurance premiums proceeded as agreed.

    In April 2009, my father was diagnosed with lung cancer in late stage 3B. Prognosis was guarded. The doctor stated that other patients he diagnosed at the same stage had lived 3 months, 6 months, 1 year and 2 years.

    In May, my father, who turns 67 in August, received a letter stating that during a routine audit, they found that he didn’t qualify for mortgage life insurance. His initial application in 2002 was only to a maximum age of 65.

    In the letter was a cheque for a refund of life insurance premiums he had paid since 2007.

    If he was not eligible for insurance, then it should have been brought to his attention during his renewal process in 2007… at age 65!

    My father is now under extreme duress because of his medical condition and lack of insurance. He’s followed up with the supervisors of the mortgage company and they’ve said his case is being processed by the underwriters. They’ll contact him when his issue has been resolved.

    He has been waiting for two weeks now and fears he may get the runaround.

  16. JH

    Jun 12 2009

    Most life insurance purchased from insurance brokers is underwritten at the time the policy is signed, but not so with mortgage insurance purchased through a bank.

    In this case, the mortgage is underwritten only at the time when a claim is made. This allows the underwritter to look backwards to determine if the policyholder had any medical condition that they might be responsible for leading to a claim.

    The result is that family purchasers might find themselves disqualified.

    The insurers’ argument is that the mortgage insurance sold through banks is done by persons not licensed to deal with insurance, hence the unusual underwriting strategy.

    I’m certain this of little consolation to families who thought they were covered.

  17. RS

    Jun 22 2009

    In 2002, my father applied for a 5-year mortgage, as well as mortgage life insurance. He was 60 years old.

    The application for mortgage life insurance specified that approval would be granted only to applicants below 65 years of age. Qualifying for both, he was approved.

    In 2007, at age 65, his mortgage and mortgage life insurance was renewed for another 5-year term. He was informed that he was covered up to the maximum insurable age of 70.

    New applicants could only qualify if they were less than 65 years of age. But after qualifying, the maximum age of coverage was 70 years. This was the case for him.

    His mortgage and life insurance renewal were approved. Monthly withdrawals for mortgage and life insurance premiums proceeded as agreed.

    In April 2009, my father was diagnosed with lung cancer in late stage 3B. Prognosis was guarded. The doctor stated that other patients he diagnosed at the same stage had lived 3 months, 6 months, 1 year and 2 years.

    In May 2009, my father received a letter saying he didn’t qualify for mortgage life insurance after all. His initial application in 2002 was only to a maximum age of 65. He turns 67 in August.

    In the letter was a cheque for a refund of all the life insurance premiums he had paid since 2007.

    If he was not eligible for insurance, it should have been brought to his attention during his renewal process in 2007 at age 65!

    My father is now under extreme duress. He’s followed up with the supervisors of the mortgage company and they’ve said his case is being processed by the underwriters. They’ll contact him when his issue has been resolved. He has been waiting for two weeks now and fears he may get the runaround.

    The mortgage is with First National Finance Corp. The underwriter of the insurance policy is Manulife.

    From my understanding, First National made a huge mistake in processing my father’s renewal with an age limit of 65 for insurance coverage. Manulife discovered the problem during an audit and revoked my father’s insurance.

    So who’s at fault? They were taking out insurance premiums from his account for 2 years since renewal. So from my dad’s perspective, he was covered.

    If my father had known he was ineligible, he definitely would have gotten coverage elsewhere! First National keeps telling my father that Manulife has his case under review.


    Thanks, Ellen. They *suddenly* changed their tune and decided that my dad was indeed covered!

    You turned around two weeks of hell for us. Now my dad can sleep well and focus on his health.

  18. IK

    Jul 14 2009

    My dad had two lines of credit with the Bank of Montreal.
    He had been paying for life insurance on them for the past 10 years. One line of credit is for $90,000 and the other for $10,000.

    He passed away in November last year. Now the bank is refusing to honour his life insurance, saying they had mistakenly been taking premiums out of both of his accounts for 10 years.

    They claim that my dad should have checked his statements and told them about it and that he never signed any insurance contract to begin with.

    This is all very hard to swallow. I sent them statements with handwritten notes by my dad (i.e. he was checking his statements).

    When you call their general inquiry line and ask if the line of credit is insured, you get an answer saying yes it is. So if my dad would have called, he would have gotten the same answer and assumed that he was covered.

    As a gesture of “good will” on their part, they have offered to give my dad’s 5 year old son (my stepbrother) $500.

    I’m at a loss for what to do. This is almost impossible to bear on top of my dad passing away.

    Any help on your part would desperately be appreciated.

  19. tony

    Mar 11 2010

    hi I’m in a little bit of a situation. My father who’s 70 doesnt have any insurance, but a house with a mortgage that was renewed last year. He has cancer. Is there any type of insurance i can get for him? My main worry is my mom, who’s been a housewife and never worked.

  20. Wendy

    May 26 2010

    I’ve run into a similar problem with post-claim underwriting of a life insurance policy that I had for my husband. He passed away in 2009, but the life insurance company (Manulife) only investigated his medical history after he was gone.

    This was a CAA group policy obtained through the Alberta Motor Association and the policy was originally taken out in 1996, so naturally the medical records are ambiguous and some records are now unobtainable.

    Manulife took almost an entire year to reject the claim, and that has caused me undue financial hardship and emotional stress. They took all the time they needed to reject the claim, and have given me 60 days to come up with medical records that have been destroyed.

    To add insult to injury, they also collected the insurance premiums for all those years and they have no intention of paying those back.

    The CAA refuses to intervene on my behalf. They say I am insignificant in the large world of insurance and Manulife would only refuse this claim if there were really something wrong with it.

    Anyone who is considering taking out life insurance through the CAA should definitely look elsewhere.

  21. Steven Taylor

    Oct 31 2011

    Stay away from Sun Life!

    I had a minor heart attack on June 11 of this year. Two months later, I remembered that I had mortage insurance (death and disability).

    So I called Sun Life and informed them of my heart attack. At that point, I was told that I had to cover the first 4 weeks as my deductible, no problem.

    Then I was told that I would be sent forms that I needed to bring to my surgeon, my family doctor and my employer. I received these forms a couple of weeks later, filled them out and sent them back to Sun Life.

    After another 3 or 4 weeks, Sun Life said they wanted my health history from my doctor for the last 5 years. I guess they figured I was trying to rip them off and they wanted to make sure I was legit.

    Having nothing to hide, I asked my doctor to make all the copies needed by Sun Life for this claim.

    After playing phone tag with my doctor and Sun Life for another 5 or 6 weeks (mostly waiting to hear back from Sun Life), they said that they had received the files and were reviewing them. They would get back to me within the next 7 or 8 business days, which brings us to today.

    Today, I called them up to see what the status of my claim was. Sun Life said my claim had been disqualified because, after reviewing my doctor’s notes, they noticed that I had some arthritis on my left knee that I had neglected to mention in my application.

    You heard that right, arthritis! I thought the rep was pulling my leg and I asked her to repeat that. She did and I lost it!

    Basically, Sun Life will refuse you disability insurance if you have arthritis on your knee! She insisted that no one would recieve the insurance with mild knee arthritis.


    They saw nothing on my doctor’s form that said I was misleading them or had a pre-existing heart condition, so they found the only thing they could to use to disqualify me.

  22. marc taillefer

    Mar 2 2012

    I supposedly have insurance on my credit card, but now I have cancer I don’t qualify because it doesn’t kill you fast enough.

    I don’t understand why a company like CIBC Visa would have anything to do with Canadian Premier Life Insurance Co.

  23. elizabeth barry

    Apr 1 2012

    To be honest, I don’t believe any more in health insurance;You cannot get these companies to pay you, after you pay them for years and years and keep within the rules of the original questions. WE need a collective voice on insurance. I don’t believe the 97% paid out, all I ever hear from friends is the disappointment and disbelief they experience when they hear the utter nonsense (you didn’t tell us your Doc said take a baby aspirin a day!) to prevent them from having to pay you. Perhaps we can form our own groups and insure ourselves.
    I pay car, longterm health, condo, umbrella, cottage, personal articles, travel, all these insurances each month. I could actually put that money in the bank (well except for the arm I guess) and use that to get out of trouble. When I am away, and check my bank & visa from away, all the debits are nothing but insurance (ok and taxes). sigh. All my clothes are second hand!!!!

  24. elizabeth barry

    Apr 1 2012

    sorry- i meant “except for the “car” insurance. I guess I need typo insurance too.

  25. Victoria

    Mar 27 2013

    This is all about trust, isn’t it?

    We as consumers must spend the time to find someone knowledgeable enough in this area and trust them to act with our best interests at heart, or we MUST be prepared to educate ourselves (as we innately have our best interests at heart.)

    Financial education is not a top priority for many Canadians, and sadly, we find ourselves buying terrible products, expecting payouts and feeling duped, angry and frustrated when we realize what has happened.

    Like most other things – from cosmetics, to food, to finance – there is a tag on every product in this world saying “BUYER BEWARE.”

    It may seem like a hassle to do the extra homework or ask the difficult questions, but you know what’s even more of a hassle?

    Needing to work when you’re sick or dying.

    It’s wrong, but it’s reality, and we are the only ones who can make the changes necessary.

    If we all did our homework, realized how bad this product is and decided collectively to stop buying it, I’m pretty sure it would either improve or be taken off the “shelves” completely.

    Spread the word and help fellow human beings. If you were duped, others will be, too. Thank you, Ellen, for this article and for educating us.

  26. AM

    Oct 22 2013

    Hi Ellen, I have purchased the critical illness insurance and life insurance from my bank on my mortgage and line of credit. This was before I read your article.

    I am now being tested for ovarian cancer and I am concerned that the bank is not going to cover my loans if my tests come back positive.

    Do you have any suggestions for me so that I can be prepared to battle my bank if they don’t come through with the insurance on it?

    I am not ready for a battle, but if battle I must, then I will, but I don’t want to go in to it blind. Thanks so much.

  27. Brian Poncelet,CFP

    Dec 10 2013


    A good start would be get the contract from the bank. As a general rule, the banks will underwrite you after a claim has been made.

    The biggest problem with bank coverage is if you leave the bank (TD), you just cancelled your coverage.

    The next problem is the coverage is not as good as if you had your own policy. Also, as you pay down your debts, the coverage goes down but not your premiums.


  28. scott

    Jun 16 2014

    I was forced to buy insurance on a small loan in case of job loss or injury. It wasn’t a large sum of money.

    Then I was injured in a car accident and unable to work. The bank said we don’t want to claim it since we self-insure through CUMIS. This means you pay the bank and they pay out if they have to.

    I was jobless, injured and unable to work, but they closed my bank account and didn’t give me notice that they were doing it.

    They sent the papers after the fact. They claim they sent a letter but never did. They just sent them all at once after the deadline had passed. It said please pay by X date and it was mailed after that date.

    So then they sent it to collections. They say, “just pay what you can.” I told them screw it. I would rather take it to court.

    They broke the law by doing certain things and I have no problem bringing that to court. They went away afterward and never bugged me since.

    The debt shows up as written off, so in 2 years if they never contact me again, it goes poof.

    If they sue me, they won’t get anything because they can’t take what you don’t have. Plus if you’re not working, what are they going to to do? Take a wage you don’t have?

    The insurance is a big scam to get more money out of people. When they actually have to pay out, they just tell you to shove it so you have to hire a lawyer.

    Heck, if I knew that was what they were going to do, I would never have bought it. It was supposed to cover the balance until you were able to pay it back (when you got better).

    At this point, I feel like just saying let them sue. It will cost them $10,000 to sue and it’s more then what I owe. So what will they get back? They will get nothing.

  29. Insider

    Dec 29 2014

    I work for one of the major banks in Canada and offering insurance to people is part of my current responsibilities. I am not a huge fan of this part, but I am required to offer insurance with every credit application. I believe it’s part of our legal process.

    If a customer takes out a loan and is not offered any insurance at the time, some people may turn around and sue the bank for not advising them to protect the loan when circumstances become difficult.

    With every insurance policy, there are multiple conditions people need to be aware about. I saw a couple comments where people complained that after being approved for insurance, they were declined benefits upon the critical illness or death event. A typical clause in the policy is that if the insured individual has a pre-existing condition and qualifies for an automatic approval, no benefits will be paid if the death happens within the first 24 months of the effective coverage date.

    Unfortunately, most people aren’t aware of this clause. I bet many bank employees are not aware either. Rarely do people take time to read the insurance booklet and ask questions.

    Customers don’t realize that sales people at the bank only provide brief presentations of products and supply the rest of the information in the corresponding brochure. There is also usually a cancellation period that comes with each policy, so if customers don’t like certain terms they can cancel the policy with no penalties.

    I admit that some reps may apply more sales pressure than others, since there are incentives to selling insurance, but I am not going into ethical grounds here. I just wish that people paid a bit more attention to the contracts they enter.

    Thank you for reading.

  30. jennifer

    Jun 9 2015

    Hello, my parents had “life insurance” on their mortgage and did not know that it would stop once the age of 70 was reached. They were told only when my dad turned 70 and he died less than 3 months later.

    They had spent something like $35,000 on premiums over the years, only to be left empty handed. Is there any way my mother can go after the bank for not advising them of this age claus, which they didn’t know of until after the fact? She says she never even got any paperwork on it.

    The mortgage in question is with BMO and they live in Nova Scotia, Canada.

    Thank you for your advice.

  31. David Dudzic

    Oct 30 2015

    Hello Ellen.

    I have done a phone broadcast with Fanshawe College in London, Ontario explaining the difference between Bank Mortgage Insurance vs Life Insurance for students and alumni as well as conducting several seminars.

    If you ever want to connect and broadcast this subject – I would be interested in participating.

    Thank you for your consideration.

    David Dudzic
    Desjardins Financial

  32. Victoria

    Nov 4 2015

    I just want to clarify some information, as there is a lot of misunderstanding and misinformation out there regarding insurance.

    I have been in the insurance business for over 23 years and I can tell you not all insurance policies are created equal.

    First of all, I am not a fan of term insurance and most people do not understand that at the end of the term, the policy will automatically renew and premiums will be increased based on the insured’s age. I have seen premiums go from $33 up to $300 upon renewal.

    With a mortgage insurance policy, the premium will remain the same until the policy expiry. As the mortgage balance decreases, so does the insurance. The policy is designed this way so if you take out a mortgage in your 30s, your premium will not increase in your 40s (you are essentially paying premiums for a 30 year old for the lifetime of the policy), unlike term insurance.

    Secondly, people need to understand the insurance they are buying. NO insurance company will pay a claim without a full investigation, so if you think you should buy creditor insurance because there are no health questions, you should think again.

    If you have been diagnosed with cancer, then you won’t likely get life insurance anywhere. This doesn’t mean that if you are laid up in the hospital for 6 months because of a car accident, the insurance company will automatically deny your disability claim.

    So although you may not be able to claim for cancer, there is nothing preventing you from claiming (and being paid out) for another disability, such as one arising from a car accident. ALL disabilities are unique and need to be adjudicated as such.

    The reason why insurance companies may deny your claim and even rescind your policy is because of a material misrepresentation. Even though arthritis may have nothing to do with a heart attack, it is the insured’s responsibility to truthfully answer the health questions. Had the company known about the arthritis, it may have required more information or denied the disability insurance altogether.

    An insurance policy is a legally binding contract, issued in good faith. If an insured does not disclose everything, how can the insurance company make a decision to cover that individual? It really comes down to informed consumers.

    If you are not sure if the coverage is right for you, ask questions before you sign on the dotted line. Nobody has a crystal ball and we don’t know when we will pass away or become disabled. So please answer the health questions honestly.

    Also, all insurance companies I have ever worked for have a 2 year contestability clause (they have the right to verify health questions if presented with a claim within 2 years of the effective date). Any policies issued without health questions always have a pre-existing condition clause. This clause varies from company to company.

  33. Deborah

    Jan 15 2016

    Why should people have to prove they are qualified to activate the extra insurances they are coaxed into buying – ‘if they are smart and want to be safe’.

    Mine is BMO. The bank, of course, washes its hands of the matter. It is the insurance company I have to deal with for job loss.

    If that is the case, then why did I not have to deal with the insurance company in the first place?

    NEVER buy extra insurances through the bank, or at least through BMO.

    The Bank is threatening to cut up my card, which will harm my credit rating. And the insurance company is again stalling until the card is canceled and I will not longer qualify! Legalized white collar theft from banks!

    I am still waiting for their ‘rep’ to call me back about this.

  34. Brian Poncelet,CFP

    Mar 26 2016

    Here are some points to consider:

    The bank is beneficiary, not you.

    If you change mortgage companies, the bank cancels your coverage.

    Bank coverage goes down every year. Insurance price stays the same.

  35. Joe Blough

    Apr 30 2016

    Single Guy, no kids, dies.
    Surviving Family (mom, brothers, sisters) doesn’t necessarily know if Single Guy has a doctor, or who the doctor is.
    Bank gives Family a form, part of which are questions for Single Guy’s doctor (whom I don’t believe is specifically named). Can that part of the form go unfilled if the Family doesn’t know who Single Guy’s doctor was?

  36. Sharmaine

    May 4 2016

    I purchased a life insurance policy with TD Life Insurance in 2012. I thought I needed it at the time of purchase and after carefully consideration, I decided to cancel a few months later in 2012.

    My monthly premium was $16.47 a mont, which was directly taken from my chequing account. When I called and cancelled my policy, I noticed on my monthly statements that I was still being charged $16.47 and I only noticed this mid-2013.

    I went into my main branch and spoke to the manager. He explained that since I didn’t purchase the product in the branch, there wasn’t anything they could do, but he gave me a number to call.

    When I went home, I spoke to a customer care agent and was told my policy would be cancelled. Because I had called the previous year to cancel and it was not done, they offered me a 50% settlement. I took it because I was upset and not pleased with what happened, silly me.

    A letter was issued to me as well my account being credited. I thought this was the end of my frustrations and shortly afterward I moved.

    Let’s forward to April 2016. I have the time to go through my monthly statements once again (I’m normally busy with family and work). I noticed that I’ve been charged for the last three years for the amount of $16.47 each month.

    At this point, I’ve been a TD customer for almost 13 years and had no issues prior to purchasing my TD Life Insurance. I was fed up.

    I called TD Life Insurance Customer Relations and asked if they could see any notes on my account for my policy. The first agent I spoke to was able to cancel my policy (so he said) and offer me a settlement of $16.47.

    After speaking for minutes and pleading with him, I was offered $98.82 and a letter stating that my policy would be cancelled. I explained that I would not settle for this amount, since I called years ago and cancelled. Also, I had been a loyal TD customer for 13 years.

    He then read the notes on my account stating that I did call to cancel, but said it was my job to check my statements and six months was all he could offer me.

    I escalated my concern to the TD Life Insurance Ombudsan after getting nowhere with Customer Relations. I faxed a letter stating that I would like to be fully reimbursed, which would be about $560 over the past three years.

    I was told that the notes on my account were dated back to 2012, when I told a agent that I would like to cancel and I was given 50% reimbursement because it was not cancelled. Also, I was told a letter was not mailed to me, which means they’re calling me a liar indirectly.

    I was also told that I did call to have my policy cancelled in 2013, but the call was dropped and they did not proceed.

    “You did not call back, so we did not cancel, and you would have to be on the phone in order for us to do so. We will take 50% of the blame, but 50% of the onus is on you.”

    This is what I stayed on the phone to hear. I became irate. I’ve worked in Customer Service for almost 15 years now and nowhere are we taught to blame the customer. We are taught to be apologetic, empathetic and try to solve the problem.

    I will be cancelling my TD account when I get reimbursed. However, for the past couple of da, the lady hasn’t returned my call.

    Unsatisfied TD Customer

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