If you apply for a mortgage with any of the major banks chances are you would be offered a mortgage life insurance. In many cases the mortgage insurance is actually presented as a condition for better mortgage terms.

Mortgage Life Insurance CBC Marketplace In DenialThe “In denial” episode of CBC Marketplace presents the stories of a few bank clients that have purchased the lender’s insurance trusting that their families would be properly protected.

For reasons well presented in this episode the mortgage insurance with the bank would expose clients to long-term risks that can be easily avoided with personal life insurance.

The following section, comparing mortgage insurance with personal life insurance,  was originally posted on the episode “In Denial” page of the CBC website:

“How to buy insurance that really will protect you.

Be sure you qualify.

  • There are many terms and exclusions associated with credit insurance policies. Learn what they mean and how they apply to you.
  • Call the insurance company directly (NOT the bank that sold you the coverage) for clarification about pre-existing medical conditions.
  • Call your doctor to clarify details of any pre-existing medical conditions you may be concerned about.

Know that you can get out.

  • You usually have 10-30 days to review your policy after the initial purchase (this is known as a “cool-down” or “free look” period).
  • If you have already purchased your credit insurance you can cancel anytime. Keep in mind, however, that you may lose premiums already paid.

Shop around.

  • Consider buying from a licensed insurance broker who will explore any medical issues upfront.
  • Consider buying or topping up an individual life insurance policy to cover your mortgage.

Know your coverage.

  • You may already have adequate insurance coverage through your work or other policies. Insurance experts say it’s better to buy one traditional insurance policy than purchase a number of small policies for a variety of products.

Be sure you need it.

  • The purpose of credit life mortgage insurance is to protect your loved ones from making mortgage payments if something were to happen to you. This type of insurance may not be applicable if you do not have any dependents who would need to keep your home if something happened.

Alberta Insurance Council vs. the banks

Alberta is the only province in Canada that requires anyone selling credit insurance, including banks, to be licensed. Under the Alberta regulations, banks are required to follow set requirements for training staff and disclosure to customers. When the Alberta Insurance Council first implemented this regulation in 2001, the banks fought back, pursuing the matter all the way to the Supreme Court of Canada. In May 2007 the Supreme Court ruled against the banks and said the province of Alberta was within its rights to regulate the sale of this insurance and protect the consumer.

A copy of the judgment in the case, Canadian Western Bank v. Alberta, is available online.

To date, no other province requires banks selling insurance to be licensed. This page offers a list of the provincial and territorial regulators who would have that power, if enabling legislation were passed in their respective jurisdictions.

Mortgage life insurance vs. traditional individual life insurance

According to insurance and financial experts we spoke with, an individual life insurance policy may be preferable to a credit insurance policy. Here are the key differences between the two types of insurance.

Credit Mortgage Insurance Individual Life Insurance
Post-Claim Underwriting: Unlike individual life insurance, credit insurance sold through the bank is usually not underwritten until a claim is made. This means the insurance company may determine you are not eligible for a payout even though you have been paying premiums. For instance, a claim may be denied because an investigation of your medical records indicates you once had high blood pressure or high cholesterol that you did not disclose. Underwriting: When you apply for individual insurance through a licensed insurance broker your medical history will be examined before a policy is issued and you start paying premiums. The insurance broker will ask detailed questions and may arrange for a nurse to conduct a physical. You will know upfront whether or not you are covered.
Standard premiums: The mortgage insurance policy sold at the bank is a one size fits all policy. This means everyone who qualifies is considered to be of equal risk. The premiums you pay on mortgage insurance are a fixed amount based on your age and the amount of your mortgage. There is no discount for non-smokers or for women. The premium does not reduce as the mortgage is paid down. Individual premiums: With an individual life insurance policy, the premiums you pay are based on your individual risk. Your health history and exam will help to determine how high or low your premiums are. Non-smokers and women pay a lower premium. The face amount of the coverage remains level.
Decreasing payout: The Mortgage insurance sold at the bank covers a decreasing amount. While your premiums remain the same the amount left on your mortgage decreases. Mortgage insurance will only pay off the balance of your mortgage when you make a claim. Fixed payout: When you purchase an individual insurance policy you pay premiums for a pre-determined amount of coverage. Therefore, if you pay premiums for $100,000 of coverage your beneficiary will receive $100,000.
The bank gets the payout: Mortgage insurance is designed to pay off the bank if anything happens to you. Therefore the insurance payout will be made directly to the bank. You choose who gets the payout: With an individual policy you are free to choose the beneficiary or beneficiaries. If something happens to you, it is up to your beneficiaries to decide what to do with the insurance proceeds.

The application forms

The mortgage insurance application forms are similar across all the big five banks. In each, there are relatively few health questions, but each question covers a large range of medical conditions, as well as a wide range of situations (ranging from consulting a doctor, to receiving advice, to actual diagnosis.)

Who to call

Several bureaus are set up to receive complaints from and offer advice to consumers about banking and insurance issues.

The Canadian Life and Health Insurance OmbudService (CLHIO) is an independent service set up to assist consumers with concerns and complaints about life and health insurance products and services.

The Ombudsman for Banking Services was set up to resolve disputes between participating banking services and investment firms and their customers if they can’t solve them on their own.

The Financial Consumer Agency of Canada (FCAC) provides consumers with information about financial products and services, and informs Canadians of their rights and responsibilities when dealing with financial institutions. FCAC also ensures compliance with the federal consumer protection laws that apply to banks and federally incorporated trust, loan and insurance. If you are having difficulty finding out about your institution’s complaint-handling process or if you are experiencing delays when using it, call FCAC. However, FCAC does not provide redress or compensation and does not get involved in individual disputes.
1-866-461-3222 “

Mortgage life insurance related comments on the “In Denial” web-page.

Only within 2 weeks of the original broadcast of the episode, there were more than 250 comments on the CBC website regarding mortgage life insurance. They cannot be found there anymore, that is why we decided to preserve them.

Original comments posted on the “In Denial” page of the CBC website (comments are not available on the CBC website anymore):

As a TD visa holder for the past seven years, I immediately canceled my account upon watching this episode of Marketplace. Posted by: Michelle | Feb 6, 08 07:01 PM
I was appalled at the actions of TD and Canada Life who falsely give people the impression that they are covered by Mortgage Insurance and take their premiums month after month to a tune of 1 Billion in Profit by TD in one year. When in fact the truth is really, sign here and if and when you need it we will then tell you if you can have it. The greatest crime is in giving the public false hope and taking away their right to investigate other options to protect themselves and their families by making them think they are already protected. My heart goes out to all Men and Women who have been victimized by this method. Posted by: L. Broomhead | Feb 6, 08 07:06 PM
Oh my, I am sitting here looking at my two young children wondering what my husband may have signed and checked off on the check list with the bank. We just purchased our home in June 2007. He is deployed to the Gulf until May. When he returns home rest assured he will be going to the bank to go over his policy with a fine tooth comb. Until he does, I will have no rest! I am going to call a licensed broker and make an appointment to understand the fine details and the ‘loop-hole’ questions. Thank you so much for this program. I can not rest easy until I know our family is cared for! As for the two families that were on the program my heart goes out to them. I am sure there are many more in that situation. Shame on the banks, shame on the questions designed for a rejected claim. Posted by: Jennifer MacPherson | Feb 6, 08 07:06 PM
I just saw your show with regards to mortgage insurance and I am disgusted with what I saw. I cannot believe that TD Bank and I’m sure all the other banks selling mortgage insurance are basically ripping consumers off. They are defrauding consumers and leaving them stranded at the most vulnerable time of their lives Shame on these banks. What is going on these days? Where is their compassion. I’m totally disgusted. It’s always about money. People deserve honesty. They pay the premiums to protect themselves and their families when death and serious illness prevents them from working to pay their mortgage. This really confirms why I’m so leery about signing anything and why I’m so not trusting of anyone. What a sad world we live in. Posted by: Wendy Solsky | Feb 6, 08 07:07 PM
I was one of these people who purchased the insurance and did get hurt at work only to be told I lied on my application. I was not sure where to turn. I am disgusted that this is happening to people other than myself. I never even thought about it when it was presented to use and it was not clearly explained. Someone really needs to look further into this. Posted by: Jane Weston | Feb 6, 08 07:21 PM
I too work for one of the 5 big banks, not the one featured in your story, and we are also told how to position life and disability insurance for a sale and our sales targets are very aggressive! Regular meetings teach us how to treat any obstacles we may be faced with in selling this product. We do not have any idea how many of these claims are denied, they only disclose to us the percentage we are required to sell to get our year end bonus (2%) of our salary. The “fraud” word was used in correlation to customers not answering the heath questions accurately. The real fraud is happening TO these people by Canada Life. They are led to believe they have the insurance, pay the premiums, then are told they don’t. That to me is fraud. Posted by: Tamara in Nova Scotia | Feb 6, 08 07:27 PM
Twenty odd years ago I was a licensed agent for a series of local insurance companies. I was in the business for about 18 months and was quite successful prior to deciding that the industry wasn’t for me. My memories of that industry are quite clear and I remember being prepped for the licensing exam by a gung-ho manager who actually provided me with the majority of the questions that I would be asked. I aced the exam. I was never, and I repeat NEVER, trained on matching the customer with the policy right for them. Instead my training and mentoring was based on identifying emotional weak spots. Did they have kids? A dependent wife? Parents who were ill? Non-union jobs…etc. And to sell based on those identified insecurities. Target what they were most worried about and hit the right buttons in the sales pitch. If they answered no to question A then resort to Tactic C etc. Shameful and I simply could not continue as my manager even reprimanded me when I “undersold” my brother. I wish I could say that I was taught to match the customer with the appropriate plan but I was taught instead to identify the policies whose commissions were front end loaded and push those for max personal gain. Shame on me too I guess. Posted by: remo zucatti | Feb 6, 08 08:02 PM
I just watched this with disgust. I would demand my money back plus interest for the holding of the money for so long. I have just recently renewed my mortgage with TD Canada and for the umpteenth time I was asked the same statement that your ex TD interviewee said was put to the customer if they refused. Namely “You are aware that by rejecting this insurance you have no means of covering the mortgage if you die” Thank goodness that I took the advice of my mortgage broker in the early days – he is a certified insurance seller, he suggested that rather than get mortgage insurance we should just get a suitably large life insurance. Although I have to say he did not mention this disgraceful act. Posted by: Gary Warburton | Feb 6, 08 08:04 PM
This is outrageous, and those guilty of fraud are obvious! Is there no end to corporate malfeasance and government indifference? It makes me want to scream! Posted by: Tom O’Malley | Feb 6, 08 08:05 PM
I’ve always thought mortgage insurance was a rip-off mainly because you pay the same premium for less and less coverage. What’s with that kind of product? As suggested, we just made sure our life insurance policies covered all obligations in the event of death. Shop and shop around as pricing varies considerably, and just buy term: all you’re doing is protecting your income. To a spouse of someone serving in the armed forces overseas. You might as well cancel that bank mortgage insurance policy and look for an insurance company that specifically covers military personnel. Many policies have a ‘war clause’, see http://www.edmontonsun.com/News/Edmonton/2007/02/11/3595590.html Marketplace could do a whole story just about that. Posted by: Leslie | Feb 6, 08 08:07 PM
So because you were misled, will you get all the premiums that you paid previously? Posted by: Gloria from Hamilton Ontario | Feb 6, 08 08:14 PM
Just so everyone is clear, TD Bank is not the only bank or institution with this practice. Actually any institution selling any form of insurance other than “personal coverage” from a Life Insurance company through a Licensed Broker, is putting people at the same risk. Consider this impact on your life. Do you have “insurance” on a Line of Credit, credit card, loan, do you have work coverage or other types insurance protection? Well if full underwriting is not done upfront then problems will persist in the future. Posted by: Todd Gellatly | Feb 6, 08 08:15 PM
I thank you for bringing this issue out into the open. I am currently in the process of buying a term 20 life insurance policy, and this program was an eye opener and I have some new questions for my broker. I was reminded of Michael Moore’s movie Sicko. I didn’t think this could happen in Canada. Your program suggests that insurance brokers would better insulate customers from these problems because they are trained. My question is, what prevents insurance brokers from knowingly (while not publicly admitting it) allowing errors to go uncorrected on health question forms, when they know that it may provide their company a “way out” if a claim is made later on? I believe the government should legislate that all insurance products be controlled, such that it is the responsibility of the insurance company to do their due diligence, up front, before accepting premiums. If that means poring through medical records prior to policy acceptance, fine. But once the premiums are accepted by the insurance company, they forfeit their right to cancel the contract or to go back through old records looking for loopholes. Their investigation needs to be done up front. At least then, people know if they qualify or not. Posted by: Troy Farrell | Feb 6, 08 08:17 PM
I cannot believe how desperate the banks have become to make – even more – money. It is sickening. My heart goes out to the families in your story. Posted by: Peter Keller | Feb 6, 08 08:18 PM
Well they got me as well. I got my premiums back and was told that I lied. I will be getting a lawyer. Thanks for airing this story. I think they should be shut down. Let’s do it. Posted by: Arlene Scott | Feb 6, 08 08:21 PM
I was disturbed after watching tonight’s episode of marketplace. I was sitting watching the TV in disbelief and immediately ran to check my mortgage insurance papers and sure enough, there is the question that everyone was discussing on the program and yes, we had indeed checked off no since neither one of us had anything wrong at the time. I would like to thank marketplace for covering this very important story. So many people out there are struggling to make sure that their family is provided for and work hard to do it. And mortgage life insurance was just another peace of mind for us. I will be definitely be contacting Canada Life. Why should hard working people be handing their hard earned money over for something that they may or may not be able to make a claim for if there is a need for it in the future? Posted by: Tricia Dagley | Feb 6, 08 08:22 PM
This is why I watch Marketplace. My wife and I have this type of insurance – at least we THINK we do – I’ll be calling my bank to discuss it tomorrow morning. Posted by: Jonathan Thompson | Feb 6, 08 08:26 PM
I guess my father-in-law was one of the lucky ones. His mortgage insurance claim was accepted after he was diagnosed with terminal brain cancer. It wasn’t without a lot of help from his doctors though. He can at least rest in peace as the house is clear in my mother-in-law’s name. My wife and I didn’t renew our mortgage with any of the big banks and with good reason. Tonight’s show demonstrates how far banks and insurance companies will go to make a buck. The banks and shareholders should be ashamed — profiting at the expense of the sick and dying. It’s the kind of story that makes my blood boil. I am canceling my TD account immediately and hopefully your show will move enough people to do the same. Posted by: Steven Lusignan | Feb 6, 08 08:31 PM
Erica’s investigation is truly frightening, because I had no idea you didn’t automatically qualify for mortgage insurance if you were paying premiums. You don’t find out until you need to make a claim whether or not you have coverage? That’s like buying a car and not finding out if it works until they hand over the keys. Shame on the banks. Posted by: Michael Milton | Feb 6, 08 08:35 PM
I am a mortgage broker in Nova Scotia. We are offered inducements by major banks to push their insurance products. Others will try to slip it in at the lawyers office. Unlike most mortgage brokers, I and a number of my staff are licensed insurance professionals. Even after explaining why term life is a better, safer, guaranteed to pay product, the lender successfully manages to sell their product to many customers, because most consumers trust their bank. Even when they can’t make their sale at the branch, many continue to nag the client through telephone and mail outs to try to get the sale. The newest hook is critical illness insurance which supposedly pays if you are diagnosed with a terminal illness and pays even if you survive. I tried reading a policy from a lender and I had trouble understanding it and I sell insurance. What I did understand was they covered 5 major illnesses. Our regular policies cover over 20. The man with cancer would have been covered with properly written insurance. I really hope something good happens for him. So please do your research and stop treating insurance like it is a 20 or 40 dollar a month purchase, treat it like it’s a $100,000 or $200,000 purchase. In the end it might be. Sorry for being so wordy but I have strong feelings on seeing someone buy insurance and then them blindsided at the worst possible time with a denial. Post claim underwriting should be banned. It’s a bad practice. Posted by: Corey Regan | Feb 6, 08 08:43 PM
An old friend once told me “friend’s is friend’s….business is business ….don’t mix them up”…..best advice I ever got. Banks ARE NOT your friend ! Insurance Companies ARE NOT your friend ! You have to treat them as you would any huckster trying to sucker you out of your hard earned money. When you put these two together, you’d be better off with a loan shark on the street corner Posted by: Michael Doyon | Feb 6, 08 08:45 PM
I have just finished watching your segment on TD Canada Trust and Canada Life and their misleading Mortgage Insurance that they so highly profit from. My husband and I took out our mortgage with them 15 months ago for 10 years. We declined the Mortgage Insurance as we decided a few years ago it was better to buy an insurance policy for just over the amount we needed the mortgage for. But when we declined the insurance from TD, the mortgage representative did not stop harassing us and putting fear into us for the rest of our meeting that we were perhaps making one of the biggest mistakes possible. She scared me so much so that she left us alone to discuss it for a few minutes. I was trying to convince my husband that maybe she was right. Thank goodness he stood his ground and we did not buy it. I feel terrible for these people who so bravely let you share their story with us. I assure you that as of this week my husband and I will be removing all of our RRSP investments and as soon as we can we will be moving our mortgage. We will be drafting a letter to our MP, MPP, Premier Dalton McGuinty, TD Canada Trust, Canada Life and I will copy you on it. I wish these families and other out there who may be dealing with the same issue loads of luck in fighting them. I’m so sorry they have to go through that. I’m disgusted and livid with TD Canada Trust, Canada Life and any other institution that so greatly profits from misleading, pressuring, and giving all these people who purchase it such a false security. Posted by: Sandra | Feb 6, 08 08:45 PM
The same theory applies to line of credit insurance. The poor young lady who works at the Royal Bank could not or would not state that, in essence, nobody can collect. Everybody has blood pressure checks if they have a regular check-up. She hemmed and hawed until I declared that it would be impossible to make a claim according to their policy. What a scam the banks are running. Posted by: Marguerite Hodgson | Feb 6, 08 08:46 PM
Back in the 1990’s I also had credit insurance through TD Bank, for a car loan that I had. I also had reason to collect on my insurance, and was informed that I had “lied” on the application. I had checked that I did not have asthma, and they said that the doctor’s report stated that I did. I was not trying to collect because of asthma or anything to do with my lungs, but had other serious health problems which prevented me from working. I had no idea that I had asthma. When I spoke to the doctor about it, he told me that they classify any lung problems, such as bronchitis, as asthma. By the way, I did check off on the application that I had bronchitis! They refunded my premiums, and refused to pay. I have never purchased credit insurance again! TD and the insurance company were in my estimation, the fraudulent ones! Posted by: Kelly Doherty | Feb 6, 08 08:50 PM
If you have not taken possession of your house, can you cancel the mortgage insurance at the time of the final signing? If it is no good anyway, I might as well put that money to good use elsewhere. Posted by: T. Lanthier | Feb 6, 08 08:52 PM
I recall being pressured into buying mortgage insurance to ensure I got the rate that I negotiated for at the time. The mortgage lender told me I could cancel the mortgage insurance if I wished, but only after 3 months. Well, I did end up purchasing so I could get the rate, but it was quite the hassle to cancel it, they did so only after repeated calls and complaints. Question now is, for those now aware of what is going on, how can they stop and get their previous premiums payments returned? Posted by: Melanie | Feb 6, 08 08:58 PM
The irony is that we have universal health care (definition open to interpretation) in Canada. We are encouraged to take the appropriate tests (PAP smears, mammograms, PSA etc) as early detection is essential for survival. In the end, even a yearly physical could mean financial ruin. Posted by: Jane | Feb 6, 08 09:00 PM
As a licensed life insurance professional for the past 25 years I have seen many mortgage claims not paid. This practice of selling mortgage insurance is not only done by the banks but also by mortgage brokers. The commissions paid can be as much as ninety percent of the first year premiums. This results in many medical questions not being disclosed properly so commissions can be paid. A good mortgage broker will refer their clients to a licensed insurance professional. If a law suit does occur the client should sue not only the life insurance company but also the mortgage company, broker, and/or the person who asked the medical questions. Someone has to be held accountable. Millions of dollars are being made at the client’s expense. I am impressed that Marketplace has done such an excellent report of the truth and possibly helped many Canadians avoid future dilemma. Posted by: Randy Gordon | Feb 6, 08 09:08 PM
I remember sitting with our BMO banker going over the mortgage insurance form. I asked if I should answer ‘yes’ to the question about seeing a doctor for a mental disorder, since I had some postpartum depression the previous year. The banker said “Don’t worry about it, just check off ‘no'”. Foolishly I listened but have worried about it since, and Marketplace confirmed my concern was valid. I was lied to! We are seeing an insurance broker tomorrow. What happens if you answer yes to the questions? Can they still deny your claim? Posted by: Carol Riordan | Feb 6, 08 09:09 PM
I had a mortgage with Canada Life through Scotia Bank. They closed my branch and moved me to a branch that is too far from my house so when my mortgage became renewable, I switched to a branch of the Scotia that was closer to my home. Canada Life cancelled my insurance because they made me reapply and I filled out that I had an insitu malignant mole removed. I gave them my surgeon’s name so he could explain to them that I was 99.95% cured but they rejected it anyway. After my manager retired he told me that what they did was illegal (I was already insured so they couldn’t legally cancel it because it was a renewal) but they won’t give me a reply. Posted by: Fran VanSickle | Feb 6, 08 09:12 PM
Yes, mortgage insurance is a fraud. I attended my RBC branch last spring to renew my mortgage. I was three months out of Chemo for cancer, with no hair, and still they pushed this product at me. Even after I told the RBC employee I would not qualify due to my battle with Cancer, they still pushed it, had me sign a waiver and then followed up by mail, threatening that if I didn’t pick it up by a certain date I would not qualify. Is this not fraud? I could certainly relate to the poor man interviewed on your show who was denied while he was fighting cancer. This is a despicable practice and should be outlawed. Just outrageous. Posted by: Sue | Feb 6, 08 09:14 PM
SHAME ON OUR BANKS – So this is why they got into the Insurance business – they’ve been investing Canadians monthly premiums until their clients get sick or die and then deny their claims? Do the math, just think of all MILLIONS of dollars in premiums being invested by these Banks since they got into the insurance business – for their own profit – and then have the audacity to deny claims and only refund their paid up premiums. They sponge off others to get rich quick and another reason why their Profit Margins have soared upwards since they got into this line of work. If this isn’t a Scam, I don’t know what is. It is absolutely misleading the public. If we stand together, I’d say every one should cancel their policies with their Banks. Financially, this will make a greater impact on misleading their clients. Posted by: Francine in New Brunswick | Feb 6, 08 09:17 PM
Finally, someone willing and able to stand up to the Big Banks! This treatment of people who believe they are doing the best thing for their families is appalling. Unfortunately being an independent licensed insurance broker in the business for 20 years, I have had a chance to hear many such horror stories. I have always tried to make everyone I know of aware of the significant differences and the benefits of personally owned life insurance vs the mortgage insurance with the bank, whether they do business with me or not. Always deal with an experienced independent advisor who understands your needs. They will always look out for your best interests, guide you through the process and give you visibility to all of the options that may be available to you. I’ve been sending out emails to those I care about for the past couple of days regarding this episode encouraging them to learn more. Another credible voice shouting the same message never hurts. Posted by: Dan Holmes – dholmes003@sympatico.ca | Feb 6, 08 09:23 PM
I am a licensed Insurance Advisor and unfortunately, I have run across many people who have this coverage with a bank and were not aware that the underwriting is done after something goes terribly wrong. I truly sympathize with both of the women on the show. I have had a few clients whose spouse has passed away only to find out that the mortgage will not be paid off. The Broker that was featured was absolutely correct in all his statements. When I sit with clients we have at least 30 medical questions that need to be explained and answered during the application process. These questions are very specific. I have had client surprised by just how much detail is involved in the underwriting process. Before I started in this business my husband and I did have mortgage insurance with our bank. We do not anymore. At least I am confident now that if something were to happen to either of us the mortgage and other bills would be covered. My advice would be to contact a licensed Insurance Advisor to discuss options. Posted by: Kim | Feb 6, 08 09:23 PM
I watched your program on Mortgage Insurance and felt like I was living in the past. I lost my husband Bob to cancer December 2002. We had taken out mortgage insurance with the TD Bank just 15 months earlier. Approximately 12 months after taking out the insurance he was diagnosed with cancer and in his remaining months he was under the impression the mortgage would be paid off. He answered no on the health questions so we were doomed from the start. After weeks and weeks of questions, I was getting uneasy whether or not there was a problem, but in the back of my mind I felt everything would be okay as he died from cancer never having this problem previously so there just should not have been a problem. But like your program stated there was never a chance this policy would have been paid. To date I still carry a premium on myself as I have never been able to pay this mortgage off, but after the program I now have doubts whether the insurance company would pay off as I answered no myself and even though I in good health I regularly go to the Doctor have my blood pressure taken so am I also doomed? My heart goes out to Lee Ann and I truly hope she wins her case. I am a pensioner and find it very difficult to make ends meet without my mortgage being paid off. I commend her for taking on this task and pray she wins. It’s hard to believe that the all powerful insurance companies are being allowed to use these types of forms. They are the frauds, not the average person filling them out. I believed it was my and my husband’s fault all these years that we had done something wrong but at least now I know that I am not alone. He would have been devastated as he truly felt that everything was going to be okay. I went to 2 lawyers to pursue the matter and was told that nothing could be done.I hope and pray that both these people on your program will win in the end. Thanks for the heads up. Posted by: Paula Weaver | Feb 6, 08 09:32 PM
Thank you Marketplace for bringing this issue to the public’s attention once again. The Toronto Sun wrote an article called “Weasel clause woes” in the late 90’s that I carry with me to show clients. I have been a licensed insurance agent for the past 14 years and I learned very early in my career to advise clients to cancel any form of insurance offered through the financial institutions; whether it’s to cover a mortgage, line of credit, credit cards and loans, and own your own life insurance policy. It’s simply life insurance, disability or critical illness insurance you’re applying for regardless of being classified as “mortgage insurance” or “loan insurance” etc. When you apply for coverage with a licensed broker,the insurance company you apply with completes the underwriting at the time of application. All previous medical history is fully disclosed and additional testing such as blood/urine is collected where required. Your approval is based on your “current” health status. This allows the insurance company to accurately determine if a person is insurable for coverage and they will issue, rate or decline coverage immediately following their findings. Once a policy is in place, the company has accepted the full risk of paying out a claim should the need arise. An exception will apply for suicide or fraud so make sure you understand your policy when you receive it from your broker. Regulations need to be changed to prevent financial institutions soliciting for this coverage through unlicensed employees who cannot fully explain the plan they offer and misrepresent the coverage details by simply stating “if anything happens; you’re covered”. It’s the consumer who suffers in the end and that’s unacceptable! For those of you calling your bank to discuss this…don’t waste your time…you won’t get the concrete answers you need from unlicensed personnel. Seek the assistance of a licensed life agent to ensure you’re adequately protected! Posted by: Julie Pritchard from Burlington | Feb 6, 08 09:49 PM
Do you mean to tell me that the TD bank that I have been dealing with for years would take advantage of people like this? This is not only appalling…. It’s insane. Just because I am over 40, and have had the mandatory (and recommended) digit test by my family physician, I would be denied benefits I have been paying for the last 10 years? Well I have a digit for them!!! Here I thought I was doing the right thing and looking after my wife and kids in case of an unfortunate happening, and they would be screwed like the lady in Burlington. My heart especially goes to this woman. After losing her husband, the kind hearted banks slam the door on her and her kids, and are prepared to leave them literally in the cold? This gives new meaning to the term slimy insurance salesman. I would be much safer buying lottery tickets (I would get better odds). Posted by: Ron K | Feb 6, 08 09:53 PM
Having worked for RBC, I have to say that I was a little surprised by tonights Marketplace episode. I had one of the highest penetration points in my region for the Credit Insurance that my employer “encouraged” me to sell. I didn’t hide anything from my clients & asked them to read the form carefully & even made phone calls to our Insurance Dept while the client was filling out the form. Truth be told, I think if your mortgage professional is doing their job right & looking out for their client (as I did), I think the client is in a position to make an informed decision that will not negatively impact them. Although I don’t defend what is discussed in this episode and fully agree that banks make billions of dollars of profits on these clients, possibly for nothing, but as a shareholder, I want to see my company’s profit increase. Personally, I have creditor insurance on all of my products & I also have a personal Universal Life Insurance on the side. Royal Bank does boast a high claim approval & I have personally been involved in a couple of claims that did get approved. It’s not all bad… Just “buyer beware!” Posted by: Joel Gallant | Feb 6, 08 09:59 PM
I too feel that I have fallen prey to this scam. Is there anyone out there that can offer some recourse to this situation,that would allow me to get my premiums back? If you can,please post you answer to this page, maybe someone can give me some good advice. Posted by: Jon-Micheal | Feb 6, 08 10:06 PM
There ought to be a law to prevent these bank scams (what else could you call their action). The banks, in collaboration with insurance companies, are simply scamming people who are simply trying to protect their families from financial ruin. The premiums that they are collecting is dangerous to the consumer who assumes the protection by paying premiums. This action is not fair. Smart folk could spend their money more wisely but we Canadians are often trusting of these large banking institutions. Why else do we keep borrowing money from them at higher rates than necessary and then buying bogus insurance on that same loan. The abuse of this trust was made very obvious during the show. Posted by: Kevin MacLellan | Feb 6, 08 10:10 PM
Though I most definitely have compassion for those featured on tonight’s episode and others that may have encountered the same problem when going to TD or one of the other banks, I do not feel that it is entirely the bank’s fault. As an employee with TD I know that we are given sales targets that we should be reaching. They are not mandatory. Any type of pressure that an employee may put upon the customer to purchase mortgage insurance is not condoned by the Bank. It is the individual employee’s prerogative. Customers are given ample opportunity to review the insurance questionnaire and even consult with their doctor to insure that what they are signing is indeed correct. It is the customer’s responsibility to ensure that what they are attesting to is correct, this is not the bank employee’s problem. I find it disturbing that so many customers will try and get out of the responsibilities that they agreed to when they signed the application by playing dumb. Posted by: Heather | Feb 6, 08 10:10 PM
Thank you so much for airing this program. Last April my husband had a heart attack. We too thought that we had critical illness coverage–ironically through the TD Bank, only to be told that he was denied coverage because he had lied. This has been devastating for us as he had had absolutely no signs of any problems. In fact he has to go in every year and have a physical done because of his job. Nothing was ever said to him by the physican that he had any health issues. I feel that a nation wide lawsuit would be appropriate. If they sell the policy they should be liable. Posted by: Charlene McMillan | Feb 6, 08 10:12 PM
I question what you have said about the Province of Alberta. I do not know where you got your information from, but I am an independent licensed mortgage broker in the Province of Alberta and as such I am required, by law, to offer “mortgage life/disability insurance” to all my clients – and I am not trained at all as a “life/disability insurance professional”. I, legally, have to go so far as to have them sign a waiver which states that I have offered them the product or I could be liable. Because I have personally known people who have had the problems that your show has brought to light I have always encouraged my clients to speak to a “licensed independent life/disability insurance agent”. The lenders do make it financially profitable for mortgage brokers to “offer” this product, but I personally do not feel comfortable “upselling” just to make more money. I have been in the industry for 4 years and have only had one client actually purchase the product, even after encouraging the couple to seek “independent” advice from a licensed insurance professional. Posted by: Truth | Feb 6, 08 10:19 PM
I am truly disheartened by this revelation as it impacts my previous belief in a product, the banking and insurance industry’s motives, and my personal credibility. I work for one of the five major aforementioned banks, and was shocked with the impunity that insurance underwriters, and financial institutions will go to protect their almighty profit margins! In fairness, when we sell this product we are to provide the customer with separate insurance literature, explain that we are not licensed insurance agents, and explain that there are other insurance options available to them…knowing full well that 40-50% will choose the path of least resistance and choose our insurance. I, personally, have never pressured a client to choose our credit product insurance, but I am appalled with the resultant denials; thank you marketplace for bringing this important issue to the forefront. I think that the rest of Canada should take Alberta’s stance on this issue. Posted by: Shawn | Feb 6, 08 10:25 PM
We are going to renew our mortgage tomorrow and will certainly take a very close look at the mortgage insurance. During a previous mortgage renewal, our banker encouraged my husband to not indicate he had high cholesterol, by saying, “well it’s probably not that high”. Posted by: Judy | Feb 6, 08 10:33 PM
I’ve just emailed RBC to request a sit down. They’ve held our insurance for 25 years and I’m anxious to hear what they have to say. Posted by: Gerald | Feb 6, 08 10:36 PM
WOW! we have our mortgage insurance with TD and never gave it a thought until this show..Thank you marketplace! dh is going to call the bank and probably canceling the policy and call our actual insurance company about switching.. Posted by: Lisa in Hamilton | Feb 6, 08 10:38 PM
Let’s boycott Canada Life!! We ran into a similar situation when a family member was told to take 6-12 months off due to an injury and we actually had the insurance with Canada Life (through the Royal Bank of Canada) to cover this. He was refused coverage because at the time he signed up, he was permanently doing contract work for two employers, and had worked this way for years in his profession. He was classed as being part-time, got no benefits and Canada Life refunded his premiums. The kicker was they accepted the policy along with the Royal Bank knowing his work arrangements. Canada Life got off real cheap and he had to struggle to keep his home. I am going to tell everyone I know to steer clear of Canada Life! Posted by: Madilynn Wade | Feb 6, 08 10:44 PM
What they do is criminal. To treat people like that at a time when they are at their lowest is disgraceful. To take your money giving the impression you are covered has got to be against some law. Posted by: Bob | Feb 6, 08 11:00 PM
I too sat and watched this program in horror. Why is this post-claim process allowed? Where are our government financial regulators? Why is this type of scam allowed to be perpetrated on Canadian citizen? Because it is Big Business that is calling the shots and our government is afraid to act…I hope everyone who sees this program is emailing their MPs, their MLAs and spreading the word to their friends and family. If banks and insurance companies don’t want to cover the claims then they should not BY LAW be permitted to accept the premiums! Accepting premiums means accepting the customer as an insurance risk. This is out and out fraud. I hope that the national newspapers also take up the fight against this disgraceful conduct by banks and insurance companies. Posted by: C. Simpson | Feb 6, 08 11:11 PM
In September Of last year I had Appendicitis, my Appendix was removed and they found a carcinoid tumor in my Apendix. As a result I had to undergo A righthemi colonostemy. I was off work for 4 months. Not to worry I had protection for I had disability insurance on my home equity line of credit. I am still waiting for Sun life to pay the interest on my loan like the bank said they would. I purchased this insurance at the bank of Montreal, as this is where our mortgage is. I also have a life insurance policy for the mortgage with Sun Life. I have been on the phone with either Sun Life or the Bank of Montreal every two to three weeks trying to get this thing resolved. I am in excellent health now, and I was prior to all this happening in September, but I can’t help but think what might have happened if I wasn’t. All the crap that they are putting me through. I remember one man that I talked to at Sun Life he said don’t worry if your claim is rejected we will give you back your premiums. I am now wondering what I should do with my life insurance on the mortgage because I had cancer and I am 100% cured I have a feeling that this insurance could be rejected. Shame on the Banks and shame on the Insurance companies. Posted by: David Rubak | Feb 6, 08 11:23 PM
Thank you for bringing this to the attention of the middle market. Unfortunately with the dollars being put into funding these “trustworthy” institutions it falls in the ranks with Fast Food Chains like a McDonalds. I am a financial advisor and independent insurance broker, I have a small firm in Vancouver and it’s unfortunate that the independent channel is dwindling down as the boomers in this industry are retiring. More of the younger generation choose the security of a hourly wage through banks while others are duped into some Multi Level Marketing Financial company that is poorly regulated and push their recruiting tactics. This in conjunction with people not properly educating themselves ultimately leaves the consumer to look up in the clouds not knowing where to turn or who to trust. Posted by: Phil Razon, Vancouver | Feb 6, 08 11:25 PM
I just finished reading over the policies on Royal Banks website to investigate what we had a agreed to, which by the way at the time of signing our policy we were in our early 20’s and quite healthy, but we apparently did not then nor now qualify due to the numerous exceptions. I cannot believe that the big 5 banks who are more than happy to collect our money monthly have the audacity to rob families of their peace of mind just to fill their pockets and some how can sleep at night knowing that families such as the 2 families on your show are suffering. My husband and I are disgusted by the misleading forms and will be canceling our policy immediately. Posted by: Fabiola | Feb 6, 08 11:32 PM
If I had a TD account to close I would close it. Shame on them. I will certainly be spreading the word on what appears to be just another money grab by the banks. Posted by: Debbie Aspa | Feb 7, 08 01:04 AM
PART 1 I am a Canadian who has lived in the United States for the past 10 years. I have been connected to the life insurance industry for almost 30 years and sell life insurance comparison software to agents on both sides of the border. With that in mind, here is my concern for Canadians as it relates to the story of policies where claims are denied. First, it is the insurance companies and not the banks who are the biggest villains in this story. It is not the banks who construct the insurance product, assume the risk or get paid the premiums. Of course the banks gets paid to sell this product but ultimately it is the insurance company who makes the decision as to whether the claim will be paid or denied. Second, these are the very same life insurance companies that sell retail products through agents and brokers. What is most disturbing in the story is the apparent zeal of these life insurance companies to find an excuse not pay to the claim. In the examples provided by Marketplace, it is evident that the life companies are not operating in good faith. Posted by: Bob Barney | Feb 7, 08 01:08 AM
Part 2 The government in the U.S. has done far more to protect consumers. Here is a great example. Individual life insurance policies sold by agents in Canada and the U.S. contain what is called a “two year incontestability provision”. What this means is that a life insurance company has the right, within the first two years, to contest their decision to issue the policy. This is supposed to cover the idea that if someone made a mistake that didn’t get caught, the company could still find it and change its mind within two years. After two years the policy is supposed to be incontestible. But that’s where I believe Canadian life insurance policies are defective. Canadian law allows a life company to overturn a policy after the two year period, if the life insurance company can argue that fraud has taken place (remember – it does not have to be criminal fraud). For example, if you bought a non-smoking life insurance policy and forgot to mention those cigarettes that you had smoked before you bought the policy, the Canadian life insurance company can overturn your policy beyond the two year period. In the United States, by sharp contrast, once a policy has been in force for two years – it cannot be overturned for any reason. That isn’t because life insurance companies are nicer in the United States, it is because the law stipulates it. When was the last time that you heard that Canadian lawmakers were doing a worse job of protecting consumers than their American counterparts? I’d like to see that explored by CBC Markeplace. If the Canadian life insurance companies won’t talk to CBC, maybe Canadian politicians will. Posted by: Bob Barney | Feb 7, 08 01:11 AM
What an eye opener. Here we think we are dealing with individuals who are trained and are looking out for your best interests. What a sad world we live in. My heart goes out to all who have been taken advantage of in this way. Life is tough enough but when you are down and stricken with disease it’s hard to believe that some large corporations are out there feeding off your tough times. This is very disheartening. Posted by: Eileen, Chatham Ontario | Feb 7, 08 07:48 AM
I am a licensed agent in the Insurance Business and my passion is to hunt down homeowners with this type of insurance and explain all the pitfalls. Why it can even be considered legal to sell is an absolute disgrace.The families that have been devastated because of their faith in this product are too numerous to mention. Even today families believe that there is no way their friends at the bank or Mortgage Brokers could do this to them, and why would they. they are the banks and friends and neighbours. I highly recommend anyone who needs insurance and is offered it right here and now on the spot PLEASE, PLEASE RUN, Always buy from a licensed professional. When you are approved the contract is unilateral, meaning you control it and the coverage is always there. Posted by: Garry Dobbie | Feb 7, 08 08:25 AM
As a Financial Advisor, I have been discussing this situation with my clients for my entire life in the business (19 years), as well as the numerous pitfalls you mentioned in the program. I find that the most-misunderstood concept is the underwriting “at time of claim” that you mentioned in the show. I applaud your effort to bring this situation to light, to show Canadians that they have a false sense of protection with these type of policies. You will ALWAYS win dealing with a licensed broker, that carries errors and omissions insurance, that works in YOUR best interests, and not those of the lender. Posted by: Mr.Cary Mitchell | Feb 7, 08 09:08 AM
My Wife and I have Life Insurance with a program through our University Alumni. It had the same form that the banks have for mortgage insurance. We are now going to seek advice from an Insurance agent to make sure we are properly covered. Maybe Marketplace can follow up with this kind of insurance too. Posted by: Darryl Hodgins | Feb 7, 08 09:28 AM
I’m always very careful with those kind of shows. They usually take the exceptions and do a big show and make it so big just for the show. Do we know how much the banks paid to customers? Did we show the other part..the number of customer who were actually paid? When we do a show if you want it to be fair, you interview customers who were actually paid and what happened to their life. I don’t like when I see a show only balance one way. It only helps insurance brokers. Posted by: eric choquets | Feb 7, 08 09:40 AM
Thank you for airing this program! Having had dealings with insurance companies in the past I know for a fact that they have whole teams of staff and corporate lawyers whose primary jobs are to ensure that the company doesn’t have to pay out a claim (and they will find whatever reason they can for doing so). All policies are written to protect the insurance companies, not consumers. The fact that they team up with banks so that everyone makes billions of dollars of profits while people going through grief and illness worry about being kicked out of their houses is beyond disgusting. My questions is, what can we do about this? Beyond ensuring we get properly underwritten insurance policies, where can we write and what can we do to ensure these companies can’t continue to profit using such unethical practices? Please, follow up with some suggestions for us. Posted by: Jenn M | Feb 7, 08 09:47 AM
This episode has made me rethink a lot of things. My husband is going to look into our mortgage. It’s appalling that they can do this. I feel for both families. It makes me sad and sick to think our government allows this. The banks should hold their heads down in shame and ask for forgiveness for doing such a thing to the sick and bereaved. I hope that these people win their fights. Posted by: dee | Feb 7, 08 09:59 AM
It makes me wonder if doctors and the banks are in cahoots together. Funny that the average person cannot seem to get their health records but insurance companies/banks have no such issues. What a sad country this has become when private companies screw over someone who has just lost a loved one. Banks are now in my opinion as unethical as most lawyers. What’s in it for them? Posted by: Randy Rogers | Feb 7, 08 10:15 AM
For nearly 30 years I have been doing my utmost to advise clients about the benefits of a personally owned life insurance policy vs. anything sold through a bank or trust company where there are no ownership rights. It is a buyer beware situation when you are asked to answer and sign an insurance form when trying to convince a banker to lend you money? Really, how many people actually read and comprehend each and every question asked while sitting in the hot seat? Posted by: Bob Dickson | Feb 7, 08 10:19 AM
I work in the financial industry for Freedom 55 Financial. When helping home buyers with their financial plans the type of insurances they own and the process they went through to get coverage is of great importance. You should always make sure the policy is underwritten before the policy is placed. A little more time spent when you buy the insurance can save a lot of hassle at time of claim. Posted by: Steve Santoro | Feb 7, 08 10:33 AM
I watched your show yesterday and I’m appalled and disgusted at what I saw. I felt so sorry for the people you interviewed and what they have to go through in addition to losing a loved one and having a deadly disease. Why isn’t the government doing anything about this? The banks are obviously misleading people and trying to make them sign something that virtually no one could get approved for. Who hasn’t used those blood pressure monitors? I’m 18 and I wouldn’t get approved. I hope the banks get sued and the victims in your report get what they deserve. Unacceptable! Posted by: Alex | Feb 7, 08 11:08 AM
As a licensed insurance advisor, I was happy to see some light shed on the banks’ involvement in the insurance industry. Not only is it easier to collect on a personal policy because of pre-screening, it is also a lot less expensive than the banks’ offerings, is transferable when you move or renew your mortgage, and pays the money directly to the beneficiary rather than to the lender. Lender insurance protects the lender not the insured. This story is an excellent reason why the banks should be prevented from selling insurance without being licensed (as in Alberta) Posted by: John Lewis | Feb 7, 08 11:11 AM
Great story Thanks. It reconfirms and exposed the banks’ rapacious nature, and why they should never be allowed to get their tentacles any further into the insurance industry. Shareholders should also consider themselves a party to this mean deceitful and disingenuous willful practice if left as is. This CBC expose should be used as ammunition and to rally public and political support to counter a move by any financial institution whose actions corrupt the integrity of the licensed professionals. On the heels of this story I’ll be sending a note over to my local member of parliament demanding action and protection. Posted by: David N – from Burlington | Feb 7, 08 11:21 AM
As an x BMO commercial lender, your story on Mortgage Insurance was spot on. The Banks make an ENORMOUS amount of money from this program. The Bank would regularly push their lenders to ‘sell’ this product. If the Banks are selling it, then I agree with your guest that the Seller should be licensed. I would submit that if the insurance company is collecting the premium, then they have accepted the risk. I was quite uneasy about selling life insurance to my customers and would routinely advise the clients to seek coverage outside of the bank. At least with term life outside of the Bank coverage your premium isn’t supporting a declining balance, with the exception of commercial operating loans. If the Bank makes life insurance a ‘condition of the credit’ which sometimes happens. You can still get coverage outside of the what the Bank is offering and simply sign a form which hypothicates coverage for the loan to the bank. When we got our home mortgage the lender wanted us to take their life insurance. When I asked if it was a condition of the credit they said no. When they learned that we had term life coverage, they even asked to have an assignment to which they were told where they could stick it since it wasn’t a condition of the credit. Don’t let the the Banks push you around, they are looking out for themselves and their bottom lines, customers be dammed. Notice that the TD wouldn’t discuss this. Pretty hard to defend an indefensible position. Notice how TD wasn’t supporting their customer the mortgage holder once things went south, they just hung them out to dry, their silence was very noticeable. I would ask who is the customer of who, it appears that the Banks are in bed with the Insurance companies with a ‘do not disturb sign’ hanging on the door. I bet the Canadian Bankers Association would tell you that what the Banks are doing is perfectly fine. Posted by: Roger | Feb 7, 08 11:24 AM
After watching last night’s program in horror I immediately called my bank this morning to discuss my mortgage insurance coverage. I noticed I am now paying double what a 20 year term coverage premiums would cost me! The rep quickly added that I am also paying for disability coverage in addition to death. I wonder if this is a scam too! I’ve learned now to read the fine print and ask questions before signing ANYTHING anymore. No institution and no individual in business is your friend and isn’t thinking of your best interests – just their own. It’s a cruel world people. Educate yourselves and watch every penny that leaves your wallet from now on! I know I will. Posted by: Mira from Hamilton, Ontario | Feb 7, 08 11:28 AM
I am the life insurance broker that appears on screen. I would like to clear up some of the misconceptions that are being raised here in COMMENTS. The problem is not that you had a test for cancer, heart trouble or for high cholesterol. We have all had those. The problem is that the complex questions on the application ask for what would be considered ‘routine’ tests and most applicants are thinking in terms of serious health issues to disclose – not routine things. At claim time the insurance company asks for a copy of the provincial health records. Details that were not disclosed are used to prove non-disclosure. The fact that the non-disclosed items are not material does not seem to matter. For insurance purposes, ‘fraud’ includes a sloppily completed application form. For ANY insurance application, disclose EVERYTHING. The insurance company underwriter wants to see something like ‘October 2007, annual medical with Dr. Jones. Blood pressure, cholesterol and urine tests all OK’ The American federal government solved this claim problem over one hundred years ago. The law there states that after a policy has been in force for two years a death claim cannot be denied. As a result, the insurance companies there take a good look at applicants BEFORE they issue the policy. An American consumer can count on his policy to pay. A Canadian can only hope. Pressure should be applied to provincial politicians. Posted by: Jim Bullock (Toronto) | Feb 7, 08 11:29 AM
I was proud and pleased to see a highly recognized insurance industry professional, Jim Bullock, playing a major role in the CBC Marketplace expose on ‘mortgage insurance’. Insurance being sold by unlicensed bank employees – and, I might add, by many in the mortgage industry. There are reasons for an insurance agent being licensed. The licensing process is rigorous and not just a simple test. Licensed agents must also have mandatory annual continuing education hours to retain their license. Mortgage Insurance only covers your mortgage and the amount covered decreases as your mortgage is paid off. A Life Insurance policy, instead, will remain constant for the term of the policy – example: $200,000 Life Policy is still $200,000 at the end of a 25 yr mortgage. While protecting your mortgage from unexpected events, you are investing in security for yourself or family. The policy is also in effect from the time it is accepted. It may require a paramedical examination and detailed questionnaire, or even a request for verification from your physician. This is to protect the risk that the insurance company is taking by insuring you – but you are insured at the start, not assessed at time of claim. Our business is the licensing and continuing education of Insurance Agents and Financial Planners. It is a highly professional industry, and having non-licensed individuals (banks, mortgage companies, and even car dealers) selling insurance without knowledge of what they are selling, or full disclosure of the ‘caveats’, is a disservice to the individuals purchasing these insurance policies. ‘Caveat Emptor’ … Do your due diligence before signing any important documents. Above all, be totally truthful on your application. If you do not know your health history, a situation beyond my imagination, find out before completing the application forms. Posted by: James Cousineau | Feb 7, 08 11:32 AM
It’s not just mortgage insurance where “form scrutinizing” is affecting people’s rights. Just like the movie ‘Sicko’ on health claims in the U.S., we’ve had a terrible time getting our child’s education funds out from a company, now that’s its needed! The forms need to be filled out absolutely precisely, dates met and even then questions are asked and asked. Even the school’s registrar is helping us out with trying to get the funds. Meanwhile it has been half a year already during this “form process”! Eventually I believe the funds will come, but like your story (and Sicko)- I believe the staff are told to delay the process as much as possible, after all they are making interest on our money! Posted by: Marilyn | Feb 7, 08 11:45 AM
I can’t get my head around this one. My husband and I watched the program and our mouths dropped to the floor. Not only did we take out mortgage insurance but we were also talked into extra insurance just in case one of us becomes totally disabled and could not work. I ran to the closet and pulled out our mortgage papers and sure enough there it was in black and white “NO”. I read both insurance forms and the wording is the same, we have been paying around $130.00 a month for nothing. The timing of the show couldn’t be better, we are about to renew our mortgage next month. I will be asking a lot of questions when we go in to the bank, I can’t wait to see the look on their face when I start questioning them about their practice of insurance FRAUD. I will decline the insurance, and hope that Ontario follows Alberta’s lead. Good luck to the women on the show. I hope you get those jerks. Posted by: Robin Colbourne | Feb 7, 08 12:00 PM
Talk about adding insult to injury: The defrauding party (i.e, the banks) accuse their honest unsuspecting clients of defrauding them on top of denying their claim! Shame on the Banks! How can our government allow such scams to take place? And we are always amazed at the dishonesty that goes on in “some other countries” thinking it could never happen in Canada. Think again. My heart goes out to all the poor Canadians that are being defrauded in so many ways (the mortgage scam, the condos scams, the list goes on….) Many thanks to Market Place to bring to light such important issues. We cannot count on the Big Banks, we cannot count on Health Canada, we cannot count on CSA (Canada Security Agency), and we sure cannot count on our government to protect us. Posted by: MMG | Feb 7, 08 12:05 PM
As for the previous comment on how to get premiums back, unfortunately I believe the only recourse is to contact a lawyer. This was a very informative and sad show. Posted by: Ron | Feb 7, 08 12:08 PM
I too have mortage protection from Canada Life ,Through Scotiabank and I too answered “no” to the question for I have no health problems what so ever, But of course I have been tested for various things because I have kids and my health is very important to there future well being. Today I visited my bank for some answers. I want to know if I am covered or not. I was told they would get back to me. I think everyone should double check with their lending agency to find out if they are covered. This story should stay in the news for a while to make sure everyone is informed. Posted by: Edward Mcgrath | Feb 7, 08 12:28 PM
As an Insurance Advisor I see this on a regular basis where Banks & Credit Unions “Encourage” their staff to sell their insurance products and many of them are not experienced in dealing with insurance. Most of them are unaware of the differences in their insurance and insurance acquired privately through a broker. The biggest problem of course is in the timing of the Underwriting. When purchasing insurance through the banks they only ask a short list of basic health questions, then they underwrite after the person’s death. When purchasing through a broker and one of many insurance companies, all the medical questions are asked up front before the policy is issued. In many cases the bank insurance rates are higher, so deal with an experienced advisor/broker who will look after your needs. If truth be known, some bank employees buy their own mortgage insurance privately through a financial advisor because they know the difference in the coverages. Posted by: John Bastone | Feb 7, 08 12:44 PM
I too bank with TD until today. I’m moving to a single saving account only and transferring all investments to a financial adviser. Posted by: Dave | Feb 7, 08 12:50 PM
Finally someone is telling the truth about the Unlicensed Bank Employees selling this horrible product. I’ve been in the Insurance Industry for many years and as a licensed broker my colleagues and I, including fellow licensed Mortgage Brokers are always appalled and disgusted by the banks and the way they mislead individuals in buying this product. Your presentation at the ballroom dance class was the best! Thank you for shedding light on this unregulated sector. Posted by: Nancy Toulouse | Feb 7, 08 12:53 PM
I worked for RBC for 23 years. I left 2 years ago after I could no longer stand the fact that sales are more important than the customers. We were always pushed to sell insurance due to the high profits. If we did not sell it we were constantly nagged about it in our weekly sales meetings with our Manager. After watching last night’s show I am very upset that I have have unintentionally mislead people. Beware of Bankers. They are paid to sell, sell, sell. They are expected to be know everything about all bank products and let me tell you taking the one Mutual Fund Course required by law does not make them experts as the bank makes you believe. The big push now is taking an equity line of credit on maximum lending value of your home. Beware, they will own you Posted by: Janice in Ottawa | Feb 7, 08 12:55 PM
I watched your program on Mortgage Insurance. It is amazing how Insurance companies can present policies to consumers that appear to be in the consumer’s best interest but when it comes to collecting, look out!These companies play on the individual’s emotions and vulnerabilities to market their product. We all know this is not against the law but you have to wonder how they sleep at night. Given the current state of Health Care across the country, Insurance companies need to be taken to task for their ability to deny claims based on an individual seeking routine medical tests for Health Prevention/Promotion! It is unacceptable to be denied an Insurance claim if you have had a mammogram, PSA, or BP reading to name a few. We are allowing the Insurance Market to have some say in our health practices. People watching this show may certainly hesitate to visit a Dr. in case something turns up that could jeopardize their Insurance. The Health Care sector is under a huge strain financially and has major human resource issues. Health Promotion and Prevention has to be the way of the future if we are to maintain and improve our delivery of Health Care. Perhaps Insurance companies should honor claims for individuals who care enough about their health to engage in health care activities such as the previously names tests! The recently published Nova Scotia “PHSOR” report clearly states that we have to change the way we deliver Health Care. Let’s start by challenging insurance companies who are punitive if you seek preventive medicine. Posted by: Lorraine Phalen | Feb 7, 08 12:58 PM
Why would you buy insurance from a non-licensed person? Always go to a professional in that field for accurate information. And always, always read what you sign. Remember what you are insuring, you and your familiy’s future well being. Posted by: Nathalie | Feb 7, 08 01:01 PM
Open your eyes…its not the insurance company’s fault that you decided not to read the terms and conditions. All the information is available to you when you sign your john hancock on the dotted line. Also these programs that are aired, fail to show you the parts where they DO help millions of people through difficult times. Use your head. If you want to put the blame on someone, put it on yourself! Posted by: outraged | Feb 7, 08 01:33 PM
I called Sunlife today due to inquiring about a claim that I had submitted because recently being disabled. Not finding the answers that I needed I then asked to speak with a manager who explained to me that I had chosen “No” on the Insurance agreement a year ago. However, the previous year I checked “yes” due to having high blood pressure. A nurse then arrived at our home to do some tests, and our insurance was approved. Then we refinanced a year ago, I marked the box “no”. So I now understand that we’ve been paying this monthly premium for almost a year, thinking we are covered, and now we may not be. I explained to the manager that my illness was not related to high blood pressure. She then went on to say that if I were submitting a claim due to breaking my big toe, the issue of the high blood pressure would be a factor to due answering “no” on the claim. She even recognized that the broken toe had nothing to do with the blood pressure. It’s the way the policies are written. I am outraged at this. I stated to the manager that I was calling because I wanted to know if I should be wasting my time and their time by submitting a claim. Just let me know if I am covered due to being disabled. So, basically, it’s a waiting game to find out if my claim will be approved, they are quick enough to take our money, but slow when it comes to answering questions. I was advised that the underwriters do not see the claims unless “yes” is checked. So I suspect that many people such as myself are assuming that they have coverage when in fact they don’t. It’s almost best to check “yes”, and have a nurse visit you to ensure you will have the coverage should anything happen in the future. At what point is someone notified that they are not covered?? Seems like a case of “too little, too late”. My husband and I are currently looking at other options for insurance. We’ve decided to stay away from the banks. Posted by: Shauna M | Feb 7, 08 02:05 PM
This problem exists with mortgage insurance partly because there is no medical review done before issuing coverage. If you want to truly have coverage, talk to a Qualified life Insurance representative. Get the proper coverage and peace of mind knowing that you are fully covered. Good luck and be safe out there people. Posted by: Alex Lamore | Feb 7, 08 02:13 PM
I too have this so called Mortgage Life Insurance. Turns out it is nothing but fraud in the biggest scale. We thought we were doing something necessary to have our children’s student loans that we co-signed for insured also. Our children pay for that insurance along with their loan. This may also be another source for the Insurance companies to scam you. You have taken time to write your comments. Take the time to call your MPP to express the need to change Ontario’s Laws to ban Post Claim Underwriting. Posted by: Bruce Waymouth | Feb 7, 08 02:27 PM
Because this is so important to share with others, I have created an open Facebook group entitled CONSUMER ALERT : ARE YOU COVERED BY YOUR MORTGAGE INSURANCE?! It can be found at : http://www.facebook.com/group.php?gid=8128605911 I recommend following the steps set out in the group. And please do get the word out! People have a right to be fully informed about these types of products! Posted by: David Rodas-Wright | Feb 7, 08 02:29 PM
I to am a licensed advisor and would like to thank you for airing a true story. I’ve been an advisor for over 10 years and this is exactly what needs to be brought to consumer’s attention. I’ve discussed with many clients and prospective clients the concerns they should have about properly insuring their mortgage, but all too often most will comment that their mortgage is already insured at the bank. Most prefer to leave things as they are. I hope this attention helps people to think or at least inquire as to what they actually are covered for. The people at the bank are not licensed to sell insurance or even recommend it – they can’t. They’re told to sell it. I would suggest to those with concern, or an interest in protecting the family’s interests to speak to a professional licensed advisor. Advice: Speak to an insurance advisor and discuss the merits of personally insuring your mortgage with a personal life insurance policy. Costs are competitive and although you may be required to have a medical (blood & urine test usually), at least you will know what you’re covered for and the insurance company has accepted the risk once they approve you. DO NOT run out to the banks and cancel your mortgage insurance protection until you have looked at alternatives, and have been approved somewhere else. It’s better to have this coverage that “might pay out”, than to have none at all. Posted by: Christopher Naudain, CFP, EPC | Feb 7, 08 02:43 PM
Another problem people should be aware of is the “line of credit” insurance. It is the same as mortgage insurance, as far as I’m concerned. My husband and I are in a similar situation. We had insurance on a $50,000 line of credit and in the last few weeks have had to up the line of credit to $100,000. I was never comfortable about the insurance from the beginning but had paid on it anyway for at least 15 years on my husband and 4 years on myself. Like other people, I was sure they would pay out if anything happened. When I think back though, we were never told there were certain medical conditions that could stop us from receiving the insurance, nor were we given a copy of the conditions. I did ask for a copy a couple of months ago, and I was quite upset when I read the medical part, but assumed we would be covered because most of our medical concerns started years after. But now, asking for an increase, we had to answer questions and were told our coverage would be cancelled for the $100,000 line of credit, but we would be accepted for coverage on $50,000. Am I nuts in continuing paying insurance even on the $50,000? Is that an insurance grab or what? I am expecting a call any day from the insurance company about the questionnaire we filled out at our credit union. I am ill right now and have been in the hospital so I had to answer yes to two questions and my husband answered yes to one question. We are doomed, right? There is probably no point in paying for something we will never collect on. I will definitely question the insurance company though, when they do call about coverage. So please, make your audience aware of the line of credit insurance as well. Thanks for a great program. Posted by: Patricia Leemet | Feb 7, 08 02:49 PM
I have read some of these posts and just wanted to give you my personal opinion. Mortgage Insurance is generally much more expensive than buying Term Life. Also, you may be able to apply for Group Term Life (e.g. with your Employer, Professional Association, Alumni Association). You’re better off applying for an underwritten Term Life product and getting enough for your dependents so that your mortgage will be paid in the event of your death. If you aren’t approved for Term Life Coverage then you’d likely be declined a claim for your Mortgage Insurance bought though a financial institution! Posted by: Lisa | Feb 7, 08 02:51 PM
Frightening. I’m an advisor with SunLife Financial in Toronto. I have based my entire business and career on informing as many people as possible on the gaps in coverage with credit mortgage insurance and why people should instead take out an individual life insurance policy to protect their mortgage. Unfortunately 90% of homeowners take the bank’s coverage and are unaware they have much better options. Being in the business I hear on a regular basis from people who were denied payout upon the death of a loved one. This could have easily been avoided with a personal life insurance policy. It is without question the best way to protect your mortgage and the future of your family. Posted by: Jeffrey Ames | Feb 7, 08 02:58 PM
Hmm. I just renewed my Mortgage at TD this afternoon. After watching this I called the bank back to cancel the insurance. Posted by: Kevin Seniuk | Feb 7, 08 02:59 PM
I was totally floored by this expose and from what I see here in the comments, like many, immediately dug up my mortgage insurance policy. Sure enough I had answered “No”. I’m awaiting a callback from my bank rep now and intend to either amend my application or cancel the coverage. I’m sure the big banks are swamped with calls today and are busy planning some kind of damage control strategy. It’s unbelievable to me that any major financial institution or insurance company can be permitted to defraud, yes I said defraud the public of billions of dollars in premiums knowing full well they will never pay out. My heart goes out to what I’m sure are thousands upon thousands of families who have been deceived into thinking they have coverage only to find out at in their time of grief that they are in fact not going to be covered. This cannot be permitted to continue and our government should get off their hands and legislate an end to this practice. Posted by: Matt | Feb 7, 08 03:04 PM
There is not much more I can say about this topic that hasn’t already been said except for the fact that our great politicians do not have the backbone to shut down this form of illegal activity. I have been a Financial Advisor for 10 years and it baffles me how our country can allow people that are unlicensed to sell products where legitimate Advisors need a license to sell. We can all paint a pretty good picture of who has their hands in whose pockets when it comes to the big 5. I know that Advocis (the Insurance Advisors’ only fighting Saint) is doing a fantastic job of justifying the idea of banks not being able to sell insurance. It is just a shame that not everyone is able to see what the banks are doing to them. Banks are not your “friends”, they are out to make money and lots of it. Remember the days when the bank actually paid you some interest to have your money with them? Well, we gave them so much money that now they charge us to have it with them. When they cry for having to write off some bad loans of a couple of million, don’t forget they just posted billions of dollars of profit that quarter. Posted by: R Perron | Feb 7, 08 03:15 PM
I am a licensed insurance agent, and we do a lot of mortgage insurance for our clients. I was grateful to see the program last night, because it really sends home the message I try to give our clients. I have contracts with London Life, Great West Life, Manulife, etc…. and Ironically, I find that the hardest part is getting people to leave the bank’s mortgage insurance for an actual life insurance policy. The benefits are numerous, not including the fact that it actually costs less! People are so sure that the bank has their best interest at heart and the “insurance agent” is bad, that quite often they can’t see past it. Posted by: Cathy in Nova Scotia | Feb 7, 08 03:26 PM
As an insurance professional, my staff and i have been trying to explain the difference between “post claim underwriting” which is what the banks do, and “pre-claim underwriting” which is what the insurance companies do, to our clients for years. It seems to be a quick and easy process to purchase mortgage insurance from the bank, but sometimes the easy way, is not necessarily the best way. I guess the difference between them and us is that they are sales persons, trained to sell, and we are insurance professionals trained to understand insurance, not sales people. Posted by: Bob Couillard | Feb 7, 08 03:29 PM
Boy am I glad I watched this episode. I knew something didn’t sound right when TD offered this to myself and never actually did any medical tests to see what kind of health I was in. Being a first time home owner didn’t help either. That’s my own fault for not looking into this further. It’s a shame that the government has done nothing about this and shame on Canada Life/TD for such shady business practices. I know I will be canceling this Insurance when my renewal comes up and actually look for a company that will verify my health before taking my premiums. Posted by: Mike S | Feb 7, 08 04:05 PM
I understand that Marketplace chose to air the “negative” side of Creditor Insurance Protection. However, do remember that many other customers got their mortgage paid out thanks to such coverage. It just wasn’t aired. Good stories never get air time, do remember that. My dad passed away years ago, and the insurance did payoff our mortgage. Thank God since my mom was not working at the time. We thanked our bank when it happened! Posted by: Marc | Feb 7, 08 04:06 PM
This investigation hit the nail right on the head. I am a licensed financial advisor in Ottawa with and I have clients who are regularly surprised when I explain to them the differences between the bank’s mortgage insurance and an individual plan where the underwriting is done prior to making a claim. Posted by: Jonathan Schjott | Feb 7, 08 04:08 PM
For years I have been educating clients on the advantages of having your own insurance policy and opting out of “creditor” insurance offered by lending institutions. People need to know ALL their options when making decisions and this episode will definitely help with that. For anyone who has taken or is considering creditor protection I can offer this advice. Talk to a trusted insurance professional about your insurance needs. They will help you calculate how much you need to take care of ALL your needs – not just your mortgage. Then if the bank requires your mortgage to be insured, and only if they ask for it, have your insurance professional complete a Collateral Assignment. in the event of a claim, this will alert your insurance company to request a loan balance from the bank and issue two cheques – one to the bank and the difference to your beneficiary. If you have already taken out your creditor protection you can cancel it at any time. However, wait until your new policy is approved before you tell the bank to cancel their insurance. Also, when you look at other insurance options ask your advisor how they get paid. Look for an advisor who receives level commission for the life of the policy. Some brokers are paid a heaped commission that may stop after a few years. For example – in year one they received 100% of the premiums you pay, in year two 75%, in year three 50% and so on and so on. As the commission begins to drop you may find the level of service drops with it, or you might find your broker coming to you in 3 or 4 years with a “New and Improved” policy….so they can start their commissions over again. This is not in your best interest! However, level for life commission encourages advisors to service their clientèle to keep the premium dollars coming in. Every time you make a payment to the company your advisor gets a small piece of it….so if you the longer you’re happy the longer your advisor gets paid. Posted by: Jason White | Feb 7, 08 04:12 PM
Not only were my wife and I sold this worthless insurance we were told by the mortgage manager this mortgage insurance was mandatory in order to qualify for a mortgage! I will be calling the TD bank+my lawyer! Posted by: Michael Thompson | Feb 7, 08 04:20 PM
I’ve always chosen to avoid mortgage life insurance. Why should I pay money to protect the bank from my untimely death? Secondly why should I pay one amount for decreasing coverage? When we obtained our first mortgage we made a point of getting enough personal insurance to cover us – through a licensed insurance agent. My spouse works for a bank and even she wasn’t comfortable in going with the bank’s insurance plan having seen the number of times mortgage life claims are denied. There’s a lot of talk about getting the government involved. As much as the government likes to look like a hero and slap the banks, our government has little power. The political donations from the banks to re-election funds speak louder than the moderate outroar from one TV show. Posted by: Charles | Feb 7, 08 04:29 PM
I cancelled my TD Canada Trust mortgage insurance today. They denied doing post claim underwriting although the explanation sounded exactly like post claim underwriting. As long as I filled out the questionnaire properly they said I would have no problem. Having looked at my form and remembering the two minutes it took for the transaction with no cautions or explanations, there is no way I would not be denied. The bank has at least $1500 of mine and it feels like institutional robbery. Thievery could not be better and this is no better than purse snatching. Posted by: jane dunn | Feb 7, 08 04:47 PM
What happens to those that checked the YES box? Do the insurance companies pay out to those people, or do they try to find some “fraud” in their policy? As I checked Yes, I had to fill out a supplementary form, provide Doctor information and mail it in. Once they reviewed this, I received an Approved letter in the mail. Am I safe or am I still at risk of being denied when I file a claim? And when they receive the doctor’s file when a claim is made, do they just look at the date in your history when you filled out the form, or do they look into all your records (present and past) and use that to influence their decision? Posted by: John Smith | Feb 7, 08 05:39 PM
Like many of the other comments I read, I immediately ran to check our mortgage insurance document. And if what what said on the show was true, we wouldn’t be covered. I am angry that we have been paying all these years and like sheep signed up (just another signature on the multitude of forms you when you get a mortgage) I’ve phoned and made my appointment today to talk to our bank rep and ask some pretty serious questions and then cancel the insurance. We need to also call our M.P. and complain. I think we might take our accounts and go elsewhere but the mortgage is tied down. Posted by: Karen Pumphrey | Feb 7, 08 05:42 PM
The credit union mortgage insurance approval is up front when you apply and not when you make claim as is the situation with the banks. The credit unions also disclose their claims history unlike the banks. More people should deal with credit unions where members (people) are a higher priority than profits. Posted by: G Kennedy | Feb 7, 08 05:47 PM
As an insurance professional with over 30 years experience here in Nova Scotia, I too have heard many horror stories about this issue. I would like to put in a good word for a small number of bank employees. Myself and a several of the brokers who deal through my agency have been the recipient of gratuitous calls from bank customers who have been advised by their bank’s customer service reps that the mortgage insurance carried by the bank was not appropriate, and, that they would be better served by talking to an independant insurance broker for personally-owned insurance. Bravo for those brave souls. Yes, there are still a few bank employees who put their customers’ best interests first. Posted by: Mel Kaulback | Feb 7, 08 06:28 PM
This is not new news to a life insurance agent/broker. I have no doubt that most consumers who have their mortgage covered by the bank, have at one time been advised by an insurance professional to reconsider covering their mortgage with an individual life insurance policy. Reality is, at the moment, many consumers have blind faith in the bank. I’m looking forward to the next ‘MarketPlace’ where consumers are made aware of the bank’s policy with RRSPs. If I may suggest, next time you are talking to your insurance professional about covering your mortgage, ask them about RRSPs too. (hint – Life Insurance Act vs Bank Act). Posted by: Leslie Clarkson | Feb 7, 08 07:14 PM
Although the banks are indeed at fault, and although they do indeed share a great responsibility, it’s time to turn our reddened eyes to the insurance industry which for decades has provided FORMAL courses to claims adjusters, training them in methods to reduce payouts to an absolute minimum. I don’t excuse the banks, they make a large profit on mortgage insurance sales, but let’s get the insurance industry to toe some kind of a moral line to reduce the rip-off quotient regarding ALL kinds of insurance claims. Posted by: John | Feb 7, 08 07:26 PM
I called TD this morning to talk about our mtg insurance, only in my husband’s name. I did not take the insurance because I had a mild stroke 2004 and I am on high blood pressure medication. Imagine my surprise when they said I did in fact have mortgage insurance in my name along with my husband. I cancelled but have paid 97.00 for 13 months. When I told them that if I died and my husband put in a claim he would receive nothing because I had a predetermined condition they had nothing to say. I did not apply because I knew I would not be covered. They are sending me a copy of the form I signed. I called my bank rep. Any suggestions from anyone? Can I get my premium back for the last 13 months? Please write if you can help. Posted by: Joanne Chlan | Feb 7, 08 08:01 PM
Marketplace brought out a program that may have saved some spouse a whole lot of extra pain.They interviewed two families. That is two families too many that Canada Life has destroyed. It is unthinkable that Canada Life, at a person’s most vulnerable time in life, would pound the last nail in the coffin. I wonder how the CEO can actually sleep at night? What type of morals would deny a claim that an ordinary man has tried to provide “peace of mind” for his family, in the event of death. Moral-concerned with the principles of right and wrong behaviour.Oh yeah…the CEO leaves his morals on his 60 ft. yacht, before he goes to work, for 6 months of the year. I called Canada Life RBC today, to tell them that I lied 3 years ago on my application, and that I’d like to change my statement, so I am not fraudulent. They would not comply for the simple reason they are collecting $80/month. I have requested a cancellation form. Posted by: gord | Feb 7, 08 08:25 PM
Re: ” I find it disturbing that so many customers will try and get out of the responsibilities that they agreed to when they signed the application by playing dumb. Posted by: Heather | Feb 6, 08 10:10 PM” I don’t think the issue is that people are upset that they are denied. Well some are, but I think it it is a little misleading to try to claim that the customer is trying to defraud the banks “by playing dumb” while at the same time collecting money for a service that will never be rendered while at the same time leading these same customers to believe that it will. If I took money for a service, led my customers to believe that service would be rendered, and when the time came told them it was too bad they gave me the money because if you looked close enough I never actually said I’d do it, then I think I’d be a little careful starting my car in the morning. Just because there is a legal loophole doesn’t mean that it isn’t dishonest. I suspect that if there was a ruling that these were actually misleading documents and therefore not legal, do you really think that the agents who were so highly encouraged to sell these policies would not be left to swing in the wind. That is what I see in your response. They know they are going to get burned eventually, so they are setting it up so they can blame the agent for not fully explaining the policies with their knowledge. They should remember that you can be charged as an accessory to a crime you did not directly commit. Posted by: Trent | Feb 7, 08 08:33 PM
If you really want to investigate insurance, take a look at how whole life and universal life insurance works! That crap is a real rip off! Posted by: Ron Walker | Feb 7, 08 09:07 PM
In response to Leslie regarding, too many policies have a ‘war clause’ Primerica offers only term insurance and has no war clause for military personnel, any agent can tell you everything you need to know. Posted by: N MacDonald | Feb 7, 08 09:40 PM
While I sympathize with the families featured in this program I am surprised at how quick everyone seems to be in condemning banks and lauding licensed insurance agents as paragons of virtue. I am relatively certain that quite a few stories of claims unpaid could be found on both sides of the equation, and the bottom line is that consumers need to keep their own best interests in mind and educate themselves. Let’s not be manipulated by banks, licensed insurance agents or sensational news programs with a clearly biased agenda. Posted by: Scott Hanson | Feb 7, 08 10:28 PM
I work for a reputable life insurance company. I inform ALL of my clients of the risks involved with using a bank for life insurance. I explain the costs involved to underwrite a policy, and that the banks defer those costs until they’re approached by a client to initiate a claim. The decline rate on these claims is high due to non-disclosure and pre-existing conditions. It is also depleting benefit supported by an ever increasing premium with age. My recommendation is to call a licensed insurance advisor and insure your mortgage on a personally owned basis. The benefit will not decrease over time, the premiums won’t change as frequently, and most importantly the underwriting is done up front. It is also usually cheaper because you can consolidate all of your insurance into one plan. Posted by: Jason | Feb 7, 08 10:42 PM
Is it just me (and judging by the rest of the comments, it probably is!) or has the term “personal accountability” been deleted from English language? Let’s get this straight. Seemingly intelligent and prudent individuals are asked to truthfully complete an application form. They are not entirely forthcoming on the application, for whatever reason, and submit it for processing. Because they have declared in writing that they have made application in a truthful manner, the Bank, in good faith, begins to collect premiums for the insurance, just as any other insurer would. However, when a claim is made, the Bank reviews the information they have on file before it is paid and, if they find an irregularity, they question it, again, just like any other insurer would. After all, insurers are in business not only to provide a valuable product but to also make a profit – this should not be news to anyone. My personal experience with TD Canada Trust’s mortgage insurance was a success story (I noticed that Marketplace didn’t interview anyone like me…I guess the term “balanced reporting” has been deleted, too!) because I assumed personal accountability and was entirely forthcoming on the application form, something their representative strongly encouraged me to do. Sure, when I indicated on the application that I had a personal and family history of cardiovascular disease, they sent me some additional forms to complete and I did, truthfully, as did my family doctor. When I suffered a heart attack last year, TD paid out the claim even though I had a history of heart disease. Why? Quite simply, they could find no reason not to because of the nature of my sickness and because there were no skeletons in my closet – I reported the truth about my health history from the very beginning. I guess honesty is still the best policy. Posted by: Shane Hudson | Feb 7, 08 11:04 PM
I find it amazing at how quickly Canadians love to jump on the band wagon and bash our banks. While it is disturbing to watch two families have to deal with such loss and tragedy, I question how many families have actually had their lives made a lot easier because they did have creditor insurance and the claim was paid. Before we all run to close out our accounts, let’s be rational and look to see the other side of the story. Responsible journalism would have taken great pains to ensure that both sides were discussed instead of sensationalizing two stories and making them appear as the norm. Let the viewer decide for themselves by presenting all the facts, not just one side. Posted by: Tony | Feb 7, 08 11:09 PM
To Jim Bullock: It is my understanding that if those 2 cases were covered for 2+ years they would have had their claims accepted regardless if they lied on their application. I asked my bank. I also checked my application and found it was easy to understand, my banker was upfront to read everything carefully. I’m still a big TD fan. Posted by: Other Side | Feb 7, 08 11:13 PM
Our mortgage and mortgage insurance is with TD. Seems ever since they merged with Canada trust their fees have gone up and their services have dropped away. I pity the man with cancer battling. I too have cancer but told TD I was uninsurable. Only husband has coverage (maybe?). I will be talking to my lawyer NOT TD about what to do to have secure insurance if TD is going to scam good paying clients. I plan to move my business to another bank as well after hearing this !! TD is going to have a bad reputation and lose a lot of clients over this sneaky business. We recently had a truck rollover due to icy roads, no charges, ruined the vehicle it was paid out but our insurance Ecc….ical is demanding WE sue the country for roads conditions. It was no fault but on our insurance it states 1 fault on husband now. They said someone has to be at “fault”. What happened to no fault insurance? If we sue husband will be in court and lose his job due to lost time. What is wrong with these insurance companies? We pay pay pay for years and years and years then finally a claim and boom not what was expected. Won’t the government do anything to supervise these professional scam artists?? They are reaping billions on billions and don’t want to pay out for legitimate claims. Posted by: Emma | Feb 7, 08 11:13 PM
The only way to apply pressure to TD Bank and Canada Life is to close out one’s account at the bank and refuse to purchase any insurance through Canada Life. The activities of these two institutions is deplorable. Posted by: Bob | Feb 7, 08 11:21 PM
As an employee of SunLife Financial, I know that our agents have extensive questionnaires that they must review and explain to the customers to be approved before they are eligible for mortgage insurance. Under the banks’ insurance, it is a third party sale, meaning they purchase it from the insurance company and then provide it to their customers. So not only do you get a better product from an insurance company, but you can also pay lower monthly premiums by buying it directly from your insurance company. Also, the bank is the beneficiary on your mortgage insurance, meaning if approved, they pay directly to the bank the amount that is still owing on your mortgage. So you are paying premiums each month from the full amount of your mortgage that you took out, but your coverage is decreasing to be on par with only what is still owing. I know with Sunlife you are always covered for the initial amount that you insure, without decreasing while you pay off your mortgage AND you get to choose your own beneficiary so that they are insured. If you have a 200,000 mortgage with a 20 year time line and 15 years down the road you only owe 50,000, if something is to happen to you or your spouse, your beneficiary would be covered for the full 200,000 with SunLif, while the bank’s insurance would only pay them the 50,000 for the mortgage. What family doesn’t have more debts than just their mortgage? Make sure when you read any insurance contract or questionnaire to understand ALL the fine print, and all the questions period. If you find they’re trying to rush you into signing, it may be time to find a better agent, one that cares about their client and not their commission off of your insurance. Posted by: Jocelyn | Feb 8, 08 12:13 AM
Please take the time to read the questions and answer them truthfully. I don’t think the man in the first story answered truthfully (he was taking heart medication for 10 years). If you truthfully answer Yes to the questions and the insurance company’s underwriting department assesses your application and says you do not qualify, then that’s it – you don’t have insurance. If they say you do have insurance, then you are insured – great! Pretty simple. It is important to answer the questions truthfully. As for the 2nd man on the program, he says he never knew about his high blood pressure or elevated cholesterol – how truthful is that? What do the records from his doctor reveal. The reason the company’s underwriting department says No at the time of your application is because you are not a standard risk. If that’s the case, then attempt to get your insurance through a broker. Remember to answer truthfully ! Also, just because you misrepresented your health does not automatically mean you are denied. So, if you answered No, but should have answered Yes, then the underwriting department may determine you would have been approved if you had answered correctly in the first place. Finally, it does not matter that the condition from which you die from is related to the condition in the question. You could die in a car accident and your coverage could be denied if it is determined you misrepresented your health. Posted by: RK | Feb 8, 08 12:22 AM
[part 1] Not just banks. Credit Unions are also involved. I think people are missing the point about getting bank employees to have training in insurance. If they did, they certainly would not be able to ethically recommend this insurance. I am in this situation at present and seeing a lawyer for advice. I received the cheque for premiums paid and will not cash it, as this would say to the insurance company that I accept their decision. I do not know the legal term for it, but if you cash the cheque you will have little, if any, chance to fight it. I have a question- what do we do now? Is it even possible for us to get insurance[proper insurance] ? Aren’t we now classed as uninsurable? When I received that letter I was so shocked that I had to wait and go back and read it again, as this was incomprehensible to me. I believe that I must sell our home now but to do what? I believe that there should be a class action suit laid against all the banking and mortgage lenders that offer this type of insurance and the insurance companies behind them, and every Canadian that has ever paid premiums should be part of it. Maybe then the gov’t would actually have to do something. Because “big business” would be demanding that they do something so that they, the insurance companies. and banks, etc., wouldn’t lose their shirts. I wonder how many bank and insurance employees and shareholders have this type of insurance on their mortgages? Please advise us in the future as to how we can find out how these two brave women and the husband make out with their law suits. I may need to hire their lawyer or at least advise my lawyer of their case results. Posted by: JIL | Feb 8, 08 01:07 AM
As a Financial Advisor I would like to thank CBC Market Place for airing this episode. Anytime that something is put out by a third party that backs up the advice we give clients when we assess their needs is more valuable than words can say. Posted by: Monique Hunsley | Feb 8, 08 07:25 AM
I’ve noticed some of the comments are questioning the report, or the “accountability” of those featured. I think you are missing the boat. First, the banks were given the opportunity to respond, and they declined. Second, besides the individual tragedies featured, the episode outlined a very obvious and serious flaw in the process, that greatly benefits the bank. The fact that unlicensed and untrained people can sell a product with such drastic ramifications, both personally and financially is astounding. The entire process is flawed. The way it exists, you can disclose to the bank that you have issues, but that untrained and unlicensed employee can still tell you to check “no”. Their bonus and performance is tied to selling the product. The application is deliberately misleading, and there is no way to prove a condition was mentioned or not. Reasonable and intelligent people can have different interpretations of the same question, and if even one single person has a legitimate claim and is denied on a technicality, that is a problem. Why can’t the bank simply change the form to have 30 questions, as suggested? Why can’t they underwrite up front, like insurance companies do? Both changes would greatly reduce the chance of “fraud” or misunderstanding. The reason is because the banks make a lot of money out of it. The silence of the banks on this issue speaks volumes. If insurance industry people have difficulty understanding the form, how much of a chance do “regular people”? Posted by: Jason | Feb 8, 08 09:45 AM
I too used to work for the company stated. We were never trained to sell the insurance product. We had goals and if a customer did not take the insurance we had to explain why. The big line was to take the insurance now and check around for insurance through a broker. Full well knowing that most people do not bother after the fact. I am ashamed of what that company made us do in order to meet our goals. We were always told how much was paid out never how much was rejected. No wonder the TD did not want to comment. Posted by: Cynthia Loucks | Feb 8, 08 10:02 AM
I can certainly understand this situation. Insurance companies are quick to take your money but when it comes time to pay out- watch out! Someone needs to do something about this- many consumers are honestly answering questions on a medical insurance only to find out if they need to use it, they are denied coverage. This is the scam of the century and it’s only getting worse. READ THE FINE PRINT folks and don’t get fooled. One particular example is these insurance companies boasting “NO MEDICAL NECESSARY” – people are fooled in to thinking they will be insured. The sad fact is they DO REQUIRE a medical – when the person dies the insurance company will look back 5 years to see if they can find something to help them deny your claim. Beware of this. Ask questions, read the whole policy, get someone to clarify what it is they are really saying. You’ll be very surprised. Protect your money and your future. Don’t be a victim. Posted by: Carol | Feb 8, 08 10:02 AM
“Fries with that?”, or “Would you like the extended warranty for only $….?”. We have become, as a society, to willing to say “Yes” to those questions. After all, they imply “a deal” or “protection we need”. Unlike a $12 extended warranty on a $120 digital camera, mortgage insurance is to protect the most likely largest investment that you will ever make in your lifetime. Without much thought and consideration, most people sign, and, unfortunately, misrepresent themselves on the insurance application – quite often unintentionally. After all, they want to be accepted – but don’t realize the consequences of their actions. They also have not had the full disclosure on each of the questions asked in the application. Too much trust in the person that is getting us to sign on the dotted line, and we feel the ‘immediate’ need to sign. Not enough due diligence on finding out the bank/mortgage company employee qualification to advise you on this important decision that could either protect or ruin your financial life. Don’t run out and cancel your bank account from a knee-jerk reaction – that is an out-of-control emotional decision. We bank at TD Canada Trust, have 6 accounts, and this program has not swayed us at all in regards to our accounts. If you have mortgage insurance, review your policy and consider proper coverage through a licensed insurance agent. Ask if your bank branch has a licensed financial planner or insurance agent. Invest in yourself – take control of your financial protection. Be informed and seek out licensed professionals to help you. Personally, through a licensed Life Insurance agent, we have a Term Life Joint First-to-Die policy to protect our mortgage. It is pre-assessed and will definitely payout when the need arises. Take your time – do your homework – protect yourself properly. Posted by: James Cousineau | Feb 8, 08 11:08 AM
Not sure if this will be posted. I was one of the people interviewed on this show. I’ve read the comments posted so far. I’m pretty upset about some of the comments stating I lied about what I said on the form during the signing process. Are you people able to see the truth visa vie the television set. Did you actually listen to the show. You make it sound like I got CANCER on purpose so I could defraud the Insurance Company. I tell you what let’s change places, but I would believe you, if you stated that you honestly and truly believed you were healthy at the time of signing. Posted by: Ron B | Feb 8, 08 11:25 AM
This whole topic makes me sick! I will be cancelling my mortgage insurance immediately with Scotia Bank. Thank god I’ve only been a home owner for about 6 months now and haven’t invested thousands into this scam. I will also take pride in voicing my opinion when I walk into the bank this weekend! Hopefully it’s packed with consumers! As if the banks need MORE money! I wonder how the big wigs sleep at night! Posted by: Carrie | Feb 8, 08 11:43 AM
On Wednesday evening I watched the Marketplace show on mortgage insurance. On Thursday evening I watched Michael Moore’s movie “SICKO.” The behaviour of the insurance companies in the two shows is remarkably similar in that they are out to deny legitimate claims, thereby increasing the profits for the shareholders. If Canadians want something done about this disgrace, they need to start writing letters to their MPs and MLAs. Unless the politicians know that Canadians are upset nothing will be done. The next step is, of course, to stop electing and re-electing people who fail to keep their promises or to act in the interests of Canadians rather than corporations. Posted by: Beil T. Gregory | Feb 8, 08 12:13 PM
I’m an advisor with Sun Life Financial and have worked in the insurance industry for 29 years. Because of the pitfalls of mortgage/lenders insurance, I make it a priority to speak with home owners who’ve elected this coverage through their lender. In educating on differences between stand-alone Life Insurance and Critical Illness Insurance that’s available through an insurance provider such as Sun Life, most cancel their optional lenders insurance and place coverage that WILL pay a tax-free lump sum cash benefit at claim time. Further, this benefit amount doesn’t decline. The recipient of the claim benefit can use it as they wish. If paying off the full mortgage is still a priority at that time, they can pay it off by choice. Otherwise, they may choose to invest these funds and use interest and a bit of capital to continue managing debt they choose to carry. Here’s a scary point, some who pursue individual coverage with full medical consideration with me are unfortunately declined. It makes you truly wonder how/if lenders can really take the risk without the same consideration … and whether there would ever be a payout if a claim was made. Truly, mortgage/lenders insurance can be a false sense of security and peace of mind. Posted by: Annemarie Glebe | Feb 8, 08 01:16 PM
I am an agent with Sun Life Financial. Watching this documentary literally brought me to tears! Often I feel like a voice in the wilderness preaching that there is something better for the consumer than the mortgage insurance through their bank. I hope that this program makes a real difference in the lives of Canadian families so that they will be protected properly. Posted by: Tony Trimper | Feb 8, 08 01:27 PM
Part 1- First, I would like to state that yes, the episode was sad. No one wants to hear stories about people who are ill/have passed away being denied insurance claims. Tragic, really it is. What I feel is foolish, is that the media industry, some of the most notorious liars, cads, opportunists etc have managed to manipulate such a large audience, in 1 episode, into believing that everything they have known is fraudulent. All their life decisions were wrong. Bottom line, the man who passed blatantly lied on his application. I think it is strange that no one seems to be discussing this portion. I am diabetic. I have been diabetic for 3 years. When I took out my insurance policy and it asked if I has taken medicine for diabetes in the last 24 months, I answered yes. Because I have. I find it very hard to believe that a man who has been taking heart medication for the last 10 years would check no in that box. Then have his wife claims he didn’t understand the question? It asked if you take heart medication….you took it this morning…… the answer is yes! Plain and simple. Posted by: TDCT Supporter!!!! | Feb 8, 08 01:29 PM
PArt 2- Do not get me wrong, I am not saying there is not room for improvement; there are definitely take-aways here….for every insurance company. For the man with cancer, based on what I saw in the broadcast, I think it is outrageous that his claim was denied. But we do not know the ins and outs of the claim either so we are throwing stones with one side of the story. If this case is accurately represented, then yes, something needs to be done. My insurance is with TD Life and when I called they assured me that routine tests are not a basis for decline… and we were not provided with the entire story. Which side is providing false information to me? It is unfortunate that one bank seems to be taking all the negative PR when all banks offer the same product. No one is better or worse. I think there is definitely an onus of responsibility on us, the consumers, as well to ask questions when we do not understand. How can you let someone push you into accepting a product you don’t understand? I never have and I never will. Read the documents. Ask questions. Consult a family member, a friend. Who cares. This bank has won countless awards for Customer service….and now we all turn our backs because CBC tells us that 3 claims out of millions have been declined? Where are the examples showing me the approval rate? We have another, one-sided, Michael Moorian situation and it sickens me that my peers can be so easily manipulated one way or another. Ask questions before you start denouncing people, groups, companies. I bank with TDCT and I will be staying put! Posted by: TD Supporter | Feb 8, 08 01:36 PM
It is quite funny, my husband and I are in the process of renewing our mortgage and whether to renew our life insurance policy on the mortgage. So my husband called Canada Life this morning to find out if we have to have this coverage through them or if we could get it through another company. The first thing the representative said to my husband was “is this because of the show on CBC” and my husband said “no”. I said to my husband right away, this must have been on marketplace as we missed this weeks show. Well thanks to Canada Life for informing us about the show. A year and a half ago my husband and I purchased our second home and doubled our mortgage. The mortgage representative at the Royal Bank informed us that in order to get approval for our mortgage we had to have disability and life insurance. What a crock, thanks marketplace for keeping us better informed! Posted by: Leanne | Feb 8, 08 02:06 PM
Your article constantly indicates that it is the Bank (TD in this case) that was refusing the claim, how can that be, is it not the insurance company and not the bank that is determining the eligibility of the claim? as the Bank would not have the ability to review anyones medical records. I find your article did not take a balanced look at the whole issue as you did not cover the majority that do have claims accepted. Posted by: Mike | Feb 8, 08 05:53 PM
I have a very simple solution to the problem. Bank mortgage insurance is sold as Group insurance. Legislators/Regulators should consider whether Bank mortgage insurance is an abuse of the Group insurance concept. If an insurer using Group Insurance accepts one applicant, they should accept all, unconditionally -no questions asked. No post-underwriting permitted for an individual’s health risk – end of story. If an insurer wants the opportunity to deny an individual’s claim, let the product be sold under the rules/conditions of an individual policy format NOT Group Insurance. Posted by: Bruce Cappon | Feb 8, 08 05:53 PM
I also currently have a TD mortgage which is “Life Insured” as well as my RRSP’s and cash deposits with this bank. I do hope and expect my bank to be profitable which in turn is good for my investments with them as well as assures my deposits. I have always had confidence and respect for this bank going well back before the Canada Trust merger. After seeing the program I was very surprised at what they appear to be doing. My first response has been to approach the staff at my branch and politely request their response to your report. I also respectfully and politely let them know that I didn’t like what I heard, as it appeared that they were knowingly taking advantage of trusting customers. I shall follow up my request and see what they have to say. I did specifically refer to your program as my source of concern. I encourage any one in a similar position to contact your TD branch as do the same. Posted by: Ivan Bujold | Feb 8, 08 07:00 PM
This is really an example of business taking advantage of the public (clients) when they are asked to fill out a short medical question application, when brief answers can fall into the grey zone and have too serious an outcome on a claim. The clients most often don’t understand how seriously the answers will be taken, should there be a claim (if made some time in the future by dependents). This is far too serious when families dependent on the benefits, find that the claim is not valid due to the answers given by the client at the time of application. How misleading, how single minded in its thinking is this? This is a sad day when banks are selling products to clients, when sale of insurance products this should be done by a qualified insurance person, and not banking people? More accountability needs to be set here. Posted by: Neil Jesse | Feb 8, 08 08:42 PM
It is about time that companies like the banks and Canada Life are exposed for the injustices that they are completing on us as consumers. I work for a great Financial Services company where we are trying to educate families about this injustice. But “they’re the bank” people say. More news like this needs to get out. I help by insuring people with a private insurance policy, where they coverage is secure and in place when applied for – opposite to the bank. Spread the word – see an insurance person today. We are not all scary. Posted by: Kim Eady | Feb 8, 08 11:04 PM
Please people educate your friends and families, share this video including with your friends and families who work for the banks, and your friendly mortgage broker who is also pushing the ‘mortgage insurance’ product. People deserve to know better, and to protect themselves properly through individual or group life, disability and/or critical illness insurance. Posted by: Letitia Montana, advisor with Sun Life Financial in Toronto | Feb 8, 08 11:58 PM
I am in the Financial Services industry, and am all to aware of these kinds of tactics. One more consideration is as the mortgage drops generally speaking so does the coverage you will get. Mortgage insurance only covers the mortgage not the individuals). An example both parents tragically do not come home one night. Mortgage insurance pays only the mortgage balance no more. Proper insurance on both parents would pay twice to the beneficiary(s),estate or trust. Posted by: Scott | Feb 9, 08 12:10 AM
Absolutely true and disgusting. The fact that this is happening to people is truly horrible. I work for an insurance MGA and I fully plan on using this episode as well as other research to make sure that this does not happen to any one else. In order to become licensed to sell insurance in Alberta, you must complete a 120 hour LLQP course, and write 8 hours of examination. It is at that point you then get a life insurance license. You cannot tell me that the people they have working at the bank have even a fraction of that training. I feel so bad for the families hurt by this. I work with hundreds of insurance brokers in Alberta, so please I urge you to contact a LICENSED insurance broker for your mortgage insurance needs…guess what??? 90% of the time it is CHEAPER! Posted by: Lisa | Feb 9, 08 01:38 AM
How do we spell “CLASS ACTION” KIDS!!?? I’ve read ALL the comments to date & will say, as a 16 YEAR INDEPENDENT ADVISOR licenced for both INSURANCE AND INVESTMENTS in Mississauga, I wish to comment on some comments. Heather, if you believe the banks(PLURAL) only have “guidelines” for sales targets, try slacking off for a month or 3, & see if you get hassled about it or not. OH- for those switching banks, D’ya think the next one will be any better? I see the problem from the client viewpoint when answering vague, long, questions as this: Say 4yrs ago they got BP or Cholesterol test done, but no problem. Now they may answer no, because it was a negative result-no problem. Four yrs later, filling in bank forms, they’re thinking the bank wants to know ONLY of serious results from tests- Hi BP, triglycerides, cholesterol etc.so they answer no believing it to be the correct answer-basically misunderstanding the question. As pointed out, there’s blame for Big Insurance too,as well as the banks. As this deal shows, they hook up with any & all if it gets a sale. How many of us get the Insurance Co mailer-“NO Agent Will Call-NO MEDICAL” “GUARANTEED COVERAGE” (just no payout) Got one? UNDERWRITTEN @ CLAIM! Hear that? Sounds like your money, flushing down the drain!! Money affects us every day, yet the public education systems teach kids literally NOTHING about finances, so how then are we to make informed decisions about financial choices we must make in life. I’ve talked with people from many parts of the world, & it’s all the same story. To get ahead financially, you MUST do one of 2 things, learn about money, or win a lottery. YOU decide which has the better odds. Posted by: Bob skakie | Feb 9, 08 02:47 AM
I have sent an email to TD canada trust demanding an explanation before I decide what to do next. We’ll see what they say. I am absolutely furious that my wife does not have the protection I thought she would receive Posted by: Kevan | Feb 9, 08 10:40 AM
Reading through all the comments and having watched the show, I without question believe the financial institution and shareholders need to be taken to task regarding this ingenuous and mean spirited practice. No answer from the bank when questioned tells another story, that being senior executive complicity and full prior knowledge of the financial ramifications and profitability of such posturing. Posted by: David | Feb 9, 08 12:16 PM
As a consumer and as an Advisor with Sun Life Financial I must applaud Marketplace for exposing the deplorable actions of the banks. As a licensed life insurance agent in a regulated industry I am governed by a code of conduct to ensure that my actions are ethical and in compliance. The majority of the bank employees selling these questionable policies are simply employees pushing a product they often know very little or nothing about. Most of these individuals are not licensed to sell life insurance which brings to light a question “why are they allowed to?”. As a licensed agent I inform my clients about the shortcomings of these policies being “pushed” by the banks. Even if these policies appear on the surface to be a less expensive alternative to an individually held life insurance policy, be aware, they do not compare to the “real deal”. Coverage they offer, if you were actually ever able to make a successful claim, names the bank as the beneficiary and the amount you would be covered for, would be for an amount equal to your current mortgage balance, not the original value of your mortgage. Another key difference is a properly written policy requires a thorough medical questionnaire, and may require all or some of the following; a saliva test for screening purposes, a paramedical examination by a nurse, as well as a attending physician’s statement from the client’s doctor. This information is used by the underwriters to assess the client’s eligibilty to receive the coverage in question prior to the issuing of the contract. You’ll know ahead if you have qualified. Banks seem to prefer the “shoot first, ask questions later approach” which is invariably leaving many clients out in the cold when they try to make a claim. My advice to the consumers out there is be aware, ask questions to clarify anything you are unsure of and most of all consult with a licensed professional. It doesn’t cost you a thing to talk to us, but it may cost your home if you don’t. Posted by: Scott | Feb 9, 08 12:24 PM
Mortgage Insurance contracts as described on Market place are having a ‘post event underwriting’ process ( they check you out after the fact looking for holes). The value of an upfront underwritten insurance contract is that once the insurance company reviews your health and history and then delivers an ‘in-force’ policy, there is no turning back for them. As long as you pay your premiums, the insurance company is unilaterally bound to deliver. You get what you pay for, if you want cheap and easy insurance be prepared for an equally cheap contract, full of holes and caveats! Typical mortgage insurance is all that! Underwritten Insurance is the only way to go, it takes more time but in the end you have something you can count on! Posted by: Adrian | Feb 9, 08 12:58 PM
There are a few things that should be understood when purchasing this type of “protection: 1. You do not purchase a policy or a contract – it is merely a certificate. 2. In the event of death or disability, and only then, does the underwriting process start 3. The individual is the insured and the payor. The bank is the beneficiary 4. So we are talking about Creditor Insurance – and the bank is the Creditor – the insured or estate will never see the proceeds of the insurance.And that makes it a dubious benefit at best. 5. Financially it is not so great either: the premium remains level throughout the mortgage period even though the borrowing reduces according to schedule. 6. Speak to a LICENSED insurance agent/broker and be protected properly with a CONTRACT, underwritten at time of purchase, and with true OWNERSHIP by the insured(s). Thus NO money goes to the lender unless YOU want it. 7. Hats of to Jim Bullock and the CBC for a job well done! Posted by: Leonard Vis, CFOP, CLU, ChFC | Feb 9, 08 01:58 PM
SHAME ON ALL YOU..esp. Marketplace..The two sad stories shown WOULD have been avoided if the applicants answered truthfully/correctly to the health questions. The man with the heart issue could have looked to other means of individual insurance before his demise. The unfortunate cancer patient who’s ” Dr “did not tell him he had high BP and cholesterol…COME ON…Wendy’s next question to him should have been “What medication were you taking” as people with those disorders WILL be on medication…which he should have disclosed on the application HE signed. With these 2 cases both applicants were not truthful and therefore denied the claim. In my experience re: cancer patient, the denied claim leads me to believe that there was more medical history found in the “post underwriting” than we were told. If he only had the 2 conditions and found to have been controlled at the time of application, insurance still would have been approved up front and therefore claim approved/paid. ALL you ignorant people make me laugh. Where is the responsibility of the applicant/consumer here… did the Bank employee have a gun to your head making you sign the papers? Like any LEGAL paperwork, you take the time to read carefully (hopefully) and make sure YOU know what you are signing. If you don’t know/ understand a question, don’t ask the bank employee as their job is only to offer or make available the insurance, not sell it. Ask the insurer: they sell it, underwrite it and pay the claims. Who better to give you an informed answer to your question. MAYBE this story is making all YOU “unaware” people think twice because YOU did not answer truthfully on your application (knowingly or not). Credit insurance is a very good product and WILL benefit all families if the APPLICANTS ARE TRUTHFUL when they sign up for the insurance. The questionnaire’s are straight forward if you actually READ the questions. Cont’d below Posted by: Stacey | Feb 9, 08 03:58 PM
This segment on market place really distorted the truth.. again SHAME ON YOU MARKETPLACE! So, before the lynch mob attacks the banks or insurers.. take a look at yourselves and question your ethics… If you are concerned with whether or not the life insurance policy you signed for at the bank is valid CALL the INSURER and double check the answers you gave on the application are in accordance to your medical history . lTo: Jason… banks do underwrite up front IF a client discloses a medical history.. the bank reps do not sell the insurance for reasons you stated..they offer/make available the insurance product and it is up to the client to choose if they prefer the lower premium product/ insurance instead of the high premium cost insurance an individual product would offer with the same benefits.. sounds like you are not too informed either Posted by: Stacey | Feb 9, 08 03:59 PM
Frankly, after watching your show it is my impression that the insurance companies themselves have engaged in fraudulent activity and should be prosecuted. If they are taking home owners’ money and then subsequently denying them the coverage that they have agreed to pay out on “technicalities” then they should be prosecuted for entering contracts in bad faith. The public has a right to be protected from this type of predatory business practice. As your show demonstrated, it is the people least able to protect themselves that are victimized and these companies are no better than the thugs who mug people on the street for their money. Posted by: Richard Gordon | Feb 9, 08 04:08 PM
As a financial planner I have to say how impressed I am with this CBC report. For years I have been educating clients on the benefits of applying for, and being approved for their own insurance policy. Naturally I am biased being a licensed insurance representative; however, I have also witnessed cases of “bank” mortgage insurance policies not funding folks after the fact. If you have 20 years left on your mortgage consider a Term 20 mortgage insurance with your licensed advisor. Yes you will have more detailed questions to answer. Yes you will have a nurse visit your home to complete some tests. Assuming you are approved you will have a policy that is a contract with the insurance company. Ironically – in most cases – the premiums (what you pay) is the same as what you pay for your “bank” policy. Also the amount of coverage does not decrease as your mortgage is paid down. Similarly if you have approximately 10 years left on your mortgage consider a Term 10 policy. This type of situation is even more important for Critical Illness insurance where definitions of covered conditions (i.e. heart attack, stroke, cancer, etc…) are of utmost importance. Posted by: A Suthern | Feb 9, 08 04:11 PM
I am amazed at what the Insurance Companies and the Banking Sector do to rip you off your money. And in the end, when it is their turn to comfort your loved one, they look for ways to sneak out. It is high time that like the government of Alberta, Ontario government did something about post term underwriting to save people from being duped by these multi billion, fraudulent sectors. Posted by: PARAG AGARWAL | Feb 9, 08 04:36 PM
How do these insurance companies get the details of your medical records, or can they get that data from your Doctor.?How else can they decide if you may have “misanswered ” their questions when taking out mortgage insurance?? Does the same type of scam apply to Health Insurance you take out when taking a trip out of your province? As with a lot of insurance policies, they love to sell you “pie in the sky” policies, and do everthing possible to prevent paying off.. Take a look at what happened in New Orleans after hurricane Katrina, Insurance companies got sued big time and they lost. We need a class action against them here in Canada to level the playing field. Posted by: Winslow | Feb 9, 08 05:31 PM
If I had any accounts with TD I would close them all in protest to their ‘insurance fraud’ crime. Posted by: G .Kernius | Feb 9, 08 06:52 PM
The unfortunate part is of all this is the big banks that sell these products also sell an even bigger money maker for them. The r.r.s.p! Don’t get me wrong. In the hands of qualified and trained professionals they are a great financial tool. In the hands of the banks they are not. The same unqualified commission driven bank employees are in most branches selling all products available to them. How many canadian banks are heavily invested in the collapsing sub-prime U.S. market. By the way its your money they’re using!! The banks will be reporting soon and it “WILL BE UGLY”. Posted by: David Fetterly | Feb 9, 08 07:12 PM
I am truly disgusted with the false hope the banks are giving! It is true, the problem not only lies with the TD bank and Canada Life. All of the banks are the same. I work in the insurance industry and strongly recommend to all that have taken insurance through a bank, to check into obtaining insurance through a licensed insurance advisor. I do not sell insurance, but through working in the industry, I was lucky to have been exposed to insurance and the positive effects it had at claims time. As a single mom, I took a life insurance policy years ago from a licensed advisor. Approx 3 years ago I decided I could not gamble with the fact that I was not covered for critical illness. What would happen to me and my son if I got sick? So… I contacted a licensed advisor and took a critical illness policy on both myself and my son. I thank God now that I did. Only a year ago I was diagnosed with cancer. I was covered and had no problem with payout as underwriting happened when I applied. It was total peace of mind. Not only did my critical insurance policy pay out, but I also received a critical illness payout on the policy I took from a licensed advisor for my mortgage insurance. My heart definitely goes out to both families on this documentary. I can totally relate to the story with cancer. I was lucky that I ended up in the insurance industry, otherwise, I may have been in the same situation as this family. I could not even imagine the stress they must be going through. I truly recommend to everyone to contact a licensed advisor ASAP. Even if your bank comes back & advises that you have coverage, I would not take the gamble. An added bonus with a life insurance policy taken through a licensed advisor is that the face amount (or payout amount) always stays the same (does not decrease). With insurance from the bank, the face amount continuously decreases with your mortgage yet your premiums stay the same. The bank will be more expensive as well. Posted by: Diane | Feb 9, 08 07:35 PM
This program was a real “eye opener” for many people. I personally am in the financial services industry, including insurance, and the company I represent, (Primerica) continually recommends replacement of mortgage insurance with a “term life” policy for the very reasons illustrated through this program. At least one other person in these comments (I haven’t read them all) mentioned that mortgage insurance, though you pay a set premium for the amortization of the mortgage, the policy “IF PAID” would cover ONLY the amount remaining on the mortgage, NOT the original amount you insured for, even though you’re still paying as if it would pay the full originally amount. Therefore, get a term life policy for the length of the mortgage amortization period. This would pay off the mortgage and leave extra money for the benefit of the family should the bread winner pass away as in the instances shown on this program. Thank you MARKETPLACE for exposing this deception. Posted by: Lloyd Sheldon (Trenton Ontario) | Feb 9, 08 07:57 PM
be responsible and proactive!!I do feel horrible for these people, but some responsibility does fall upon the consumer here. I have taken out a policy with a insurance agent, and taken mortgage insurance. I made it a point to write yes in the question section, in 1 week canada life had ask me for a medical by my doctor which I did and submitted to them, and was then informed that I will be covered. the reason I did this is because i read the question and ask my Scotiabank advisor ” I am not sure, should i get a medical” he advised to call my doctor and review the question with him which i did and sure enough he said i had tested for slightly high blood ppressure, but nothing serious. I then informed my Scotia advisor which he advised to check yes, and let canada life review, which i did. I am now covered and the reason being is because i was willing to say I don’t know, and i got a professional opinion. let’s be clear here bank staff cannot be knowledgeable in credit investments and insurance, especially now that my advisor is no more then 25, but at least he was willing to provide an solution to my not knowing. Posted by: sandy | Feb 9, 08 08:00 PM
Cork-Soakers! I saw this segment on Marketplace and I’m cancelling my mortgage insurance. I can’t imagine that my wife will be able to fight the insurance company after I’m gone; I can only mitigate their corruption by funneling my honest money to her before I die… Posted by: Stephan Hoppe | Feb 9, 08 08:01 PM
cbc should be ashamed by airing this. why not find the positive side as well, like one of the last comments mentioned, i have been ill for 2 years and my bank was so helpful and my mortgage was paid, they were not time efficient but helpful nonetheless. If you are going to bring poor, ill families into this please be non-partisan. and lastly you mentioned the form has a yes or no question well what happens if you say yes? please do a better job with your stories, as I find this very amateur journalism. Posted by: disgusted viewer | Feb 9, 08 08:11 PM
As a 35 year veteran in the life insurance and financial industry, and owner of my own brokerage in Kingston Ontario, I am delighted that mainstream media would finally address an issue, that we in the life insurance industry have railed about for years. Consumers need to be absolutely sure that they purchase policies to cover their needs…policies that are underwritten at the time of issue, and NOT at the time of claim. Consumers need to ensure they are dealing with competent, licensed life insurance agents; and, preferable, ones who are able to represent a variety of life insurance companies….not just one company. The old expression caveat emptor applies….exercise your own due diligence……don’t assume someone else is doing it for you. Posted by: Jim Vowles CLU, Ch.F.C., CFP. | Feb 9, 08 08:15 PM
My wife and myself also watched the show about the Insurance “Scam” that is going on with TD Canada Trust. We are paying premiums for a Line of Credit Insurance that will pay it off if one of us dies. Yeah right. I too said ‘No’ to the questionnaire as it specified ‘in the last 24 months’. I had a heart attack 6 years previous and was told by the TD representative that since it was not within the last 24 months saying ‘No’ would be OK, so in good faith that I would be covered in case of death I have been paying premiums for the last 10 years. After watching this show I am now quite confident that I am not covered at all and am wasting my money. We have been phoning TD to try and resolve this but so far we are just getting the run around with nobody (Management) willing to phone us back. If they can’t tell me I am 100% covered I want all my premiums back plus interest. This nonsense has to stop. Everybody needs to get involved here so TD and all Insurance Companies are held accountable for their actions. I will not let this matter drop until I am satisfied. If TD doesn’t help I will go to my MP. Good Luck to the people involved who are suing the Bank. Posted by: Sid W. | Feb 9, 08 08:28 PM
My wife & I were just discussing this topic & you answered our questions. It happened just like you said…sign here or you will have to initial that you refuse to be covered. My close friend suggested that I go through a broker for more life insurance, looks like he was right about that. We will be definitely be reading our papers over and calling our bank. Posted by: Mike Miskelly | Feb 9, 08 08:41 PM
This is a scam. Does the government have any plans to regulate this? This is ruining lives. If we don’t make a claim, the banks pocket premium. When we make a claim, they return our premium. This is a very lucrative business model. My question is, what happens if I check the “yes” box, does the bank then reject my application for mortgage insurance? Posted by: Rowena Kwan | Feb 9, 08 09:25 PM
Unfortunately this money grab will only be seen as unethical conduct and NOT illegal conduct. I recently felt bad for the Americans that have Health Insurance Policies that are not worth the paper they are written on. Now our two countries have insurance policies in {COMMON} .Not to worry folks because we will all vote with our wallets and the BANKERS will wish they had sold ethical insurance policies. Just a note to my loyal bank of 30 years –> I’m coming to see you and I’m not bringing a smile :0( Posted by: Ivan Dankewich | Feb 9, 08 09:56 PM
It doesn’t make sense to buy insurance on a mortgage or loan. Instead, buy a life insurance policy to cover the original amount of the mortgage then if a tragedy does occur, or when the mortgage is paid off, you still have the insurance policy for the original amount, regardless of what is owing on the mortgage. If you buy insurance through your bank or lender, the value of the insurance decreases with every payment made on the principal of the mortgage. If you find you cannot get life insurance through an insurance company then it is probably safe to say the mortgage company would deny your claim anyway. Posted by: Kathy | Feb 9, 08 10:42 PM
I was completely floored by this report and would like to thank Marketplace for doing this piece. I called my bank (RBC) and told them I wanted to cancel the insurance as I could not believe that they could deny a claim because my wife and I failed to acknowledge we had had our blood pressure tested and had bloodwork done- simply routine tests that any doctor worth their salt would request! The agent quickly countered that there was a 2 year “non-contestibility” clause that protect us from the “misinformation” we gave on the application. Interesting- when I asked to see this non-contestibility clause- it was not in the policy book, and she could not find it anywhere. When I pressed her as to where got her facts- she told me that the info came from her training and what her managers told her! Is this not misleading? Posted by: Tim B | Feb 9, 08 10:57 PM
I too had a claim denied by Canada Trust in 1994 after the death of my spouse from breast cancer. The coverage was with respect to a Line of Credit secured via mortgage. Canada Trust held that any balance increase subsequent to the cancer diagnosis was NOT insured. I was eventually advised to drop my suit against CT & the insurance company by my solicitor. Posted by: Chris | Feb 10, 08 12:49 AM
First, I’d like to address a couple of matters: 1.As a researcher and as one who is involved with the life insurance sector for well over 30 years, it appears to me that the issues discussed in this Marketplace episode are far more widespread than just the specific bank and specific insurer who were named. 2.Both of the cases featured in the Marketplace expose involved coverage that was in force under 24 months. Regardless of whether it is individual insurance or “mortgage” or “creditor” insurance, or whether the life or disability coverage is purchased in Canada or the US, the issuer may question (contest) the veracity and completeness of answers by the applicant – and thereby the validity of the contract itself – during the contract’s initial 24 months. Most US states (though not all) have outlawed “post-claim-underwriting”. In my view, post-claim-underwriting (or point of claim underwriting) is an act of bad faith. Insurance requires the utmost in good faith by all parties to the contract. The requirement for utmost good faith and the alleged practice of post-claim-underwriting – the antithesis to good faith – cannot logically coexist. Laws and regulations need to be enacted – and enforced – to protect consumers against practices such as alleged in this Marketplace episode. This is the 2nd Marketplace episode addressing the same systemic, legal, legislative and regulatory issues within less than a year. In 2007, Marketplace aired another similar expose. You can and should view that episode and viewer comments at: http://www.cbc.markeptlace/2007/07/credit_insurance.html. Based on research involving thousands of permutations of life insurance offerings by various companies and through various sales channels, in most cases life insurance purchased in a face to face meeting with an independent licensed life insurance advisor would likely cost less and provide better value than if purchased through banks, other lenders, direct mail or the Internet. Posted by: Ami Maishlish | Feb 10, 08 03:11 AM
I contacted my bank today after I looked at my mortgage insurance. My underwriter is also “CANADA LIFE”. which is named in the story. I asked to stop payment on my $62.10 a month or $745.20 a year I have WASTED on phony mortgage insurance. I also requested repayment of the $5,216.40 plus interest. My bank is the Presidents Choice Bank. If I wanted to gamble I would have bought a LOTTERY TICKET ! Posted by: Ivan | Feb 10, 08 08:55 AM
In response to Heather (Posted Feb 6, 08 10:10 PM) …. All due respect, but when a customer signs up for a product endorsed by the bank and obviously handled by the life insurance industry and then pays a premium agreed to by the bank, then that customer has every right to believe that they have qualified for and are paying for the product promised. It is the responsibility of the Bank/Insurance company to, in advance, do their due diligence in deciding whether or not to offer coverage prior to accepting premiums. Once premiums are agreed to and accepted as payment by the Bank/Insurance company, any other action other than payout in the event of claim is tantamount to fraud. Also, using the phrase “playing dumb” is an insult to your customers. I hope they read your response and act accordingly. Posted by: Marty Chapman | Feb 10, 08 10:38 AM
Wow, what a shocker. I guess since we are supposed to “know better” because we certainly can read between the lines, that the banks shouldn’t feel responsible for our “misleading” comments. What a crock. Can anyone say “CLASS ACTION LAWSUIT”. I know that if one arises they can add my name to it in a heartbeat. Posted by: Colette | Feb 10, 08 11:44 AM
I am a licensed insurance agent and I am proud of the fact that my firm is dedicated to providing the right insurance solutions for clients and I warn my clients about the downsides of mortgage insurance all the time. Get the right coverage up front so you don’t have to worry. Posted by: Rich Engelage | Feb 10, 08 01:19 PM
Do you have any suggestions as to we who thought we had this mortgage insurance for years, with renewals happening every five years, should do? In our case, we are both over 60 now and have numerous conditions, all under control with prescriptions, but if we tried to apply for new insurance, the premiums would be out of our reach now. When we applied, to the best of our knowledge, we answered the questions truthfully with the “no”, but as you have shown that isn’t enough. I’m sure if we brought this up with the bank, it would be a red flag for them to cancel our insurance, but on the other hand, how can we determine if we are insured? There are probably a fair number of senior citizens, for a variety of reasons, whose retirement didn’t go as planned and still have a mortgage to be paid. Does anyone have any suggestions? Posted by: Connie | Feb 10, 08 03:27 PM
For all you people going to cancel your Mtg or Line of credit insurance because of A “mis informed story” on Marketplace (that was clearly one sided) are a bunch of band wagoners. Check your policy out 1st and call the insurance company not the bank and speak to an underwriter to verify that YOU had answered the health questions correctly at the time you applied for the insurance. If you answered “yes” then your policy would have been underwritten already and approved or declined at the time you applied. If you answered “No” and now feel you should have said “yes” because you “missed or forgot to disclose medical history” then you should be contacting your insurance company to verify. If you answered “no” and have re-read the copy of your application (which you should have) then you would have no worries. It’s that simple. The problems the people in the two stories are having are BECAUSE of there own fault. The bank and insurance company in these cases are not to blame. Posted by: Unimpressed with this half sided story | Feb 10, 08 04:31 PM
It seems to me that by suing, these people are spending a lot of extra money, for a small chance to get the coverage they were promised. Even when the insurance companies lose the occasional lawsuit, they are still so far ahead that there is no incentive for them to change their behaviour. If on the other hand, they were sued en masse by the people who finished paying off their mortgage, and wouldn’t have been covered had they gotten sick, the losses that this would bring to the insurance companies would make them rethink their policy. Posted by: Cam | Feb 10, 08 05:30 PM
My mortgage story is a little different, but sort of the same. My mortgage is with CIBC , and when we signed up we where suckered into adding on the insurance. It was to cover the principal amount of the loan and cost about $6 a month. Unfortunately we got behind in our payments and this coverage was cancelled. After a while we where able to get caught up with our payments. but the insurance stayed cancelled. I’m not so upset that it stays cancelled but my mortgage payment never changed.. It should have gone down by $6 dollars, the cost of the insurance, but it never did. When I asked CIBC about this, I got nowhere. Posted by: Jeff | Feb 10, 08 05:38 PM
The subject matter of this segment was quite informative, however judging from the number of respondents that are threatening to go to TD bank and cancel insurance/mortgage/accounts, it seems the CBC was also misleading. The OTHER banks do the same thing! While I agree this practice is reprehensible, why pick on TD? If I were the TD bank, I would be talking to a law firm. Posted by: Linda | Feb 10, 08 07:26 PM
Thanks CBC for a very eye-opening story! My question is this: if you are technically disqualified for something as simple as having your blood-pressure tested, isn’t it true that nobody who has a regular physical examination done by their doctor will qualify? As far as I know, having one’s blood pressure checked during a physical is a standard part off the process. Does this mean that anyone who has a physical is disqualified? Posted by: Kosta | Feb 10, 08 07:49 PM
Being a licensed insurance agent with Primerica, when discussing mortgage insurance with clients we always point out, that unless you have an actual approved policy in hand from the bank/insurance company, it is still only an application for life insurance! Funny how some applications can take many years before they are approved (or not, but you are still paying premiums!) Work with a professional licensed agent and only buy pure term insurance where you, the client, are in control! Posted by: Katherine Floyd | Feb 10, 08 09:00 PM
This is so our story. My husband became disabled in Aug, and our letters all state the same as the gentlemen with cancer. We thought we were protecting our interests and our family but that apparently isn’t so. He is still not able to return to work and our funds are quickly depleting on a $300,000.00 mortgage. We have contacted a lawyer but I am not holding out much hope. I am contacting my bank tomorrow to make sure our life portion is still covered because I’m pretty sure we would get the same answer on a claim in that department. I feel stupid (uneducated) and burned and am not really sure where to go from here, but I am getting really tired of paying for those plush offices with the view. Posted by: Kim P | Feb 10, 08 09:23 PM
I saw your show last night. My brother had mortgage insurance through the CIBC. When he filed the application he asked if he should answer YES to one question and was told not to worry about it, just mark NO. Well my brother died from a heart attack last July and guess what? The insurance company refused his claim, said he lied. My sister-in-law is desperately trying to hang onto her home. We have even had a community benefit for her to help her get through for a few months but she will probably have to sell in the spring. Posted by: Nancy Thompson | Feb 11, 08 09:59 AM
In 1997 my husband died. I was 34 with two small children ages 4 and 6. The Royal Bank of Canada did the same thing to me. It’s happening every day. Posted by: Janet | Feb 11, 08 11:06 AM
I can not say just how happy it makes me to see that someone has brought light to this subject. My husband and I had bought mortgage Insurance through Cambrian Credit Union which deals with Cumis Insurance company. My husband ended up becoming disabled and unable to work for quite a while. He had been repeatedly misdiagnosed over the years, and had a bone that completely disintegrated in his foot. This required reconstructive surgery, and may still possibly be amputated. He became unable to work through the pain at work, and was not able to recieve a proper diagnosis. One Clinic even said he had severe tendinitis. We were unable to submit a claim right away to our insurance, because without a proper diagnosis he could not be officially ordered off work, but at the same time he was unable to work. Once we did finally get a proper diagnosis, we submitted our claim to the insurance company. At first we were told that they didn’t see a reason why we would not get approved. cont.. Posted by: Christine | Feb 11, 08 11:53 AM
Cont… Which eventually turned into we got denied, because my husband was ‘not at work on the day of disability or the day the claim was submitted’. We claimed to the company to our bank, will little being resolved. Our bank manager was even very rude with us when we learned a representative from Cumis worked in their branch but, as they put it, not for their branch. Making such comments as “do I need to tell you where the bathroom is as well?”. To date we have received nothing from a insurance company we had paid premiums to for ten years. We were not even offered our premiums back for a an insurance they ended up telling my husband he was ineligible for. We currently have a lawyer trying to help us. It is now been almost 2 years later, and my husband now looks at the possibility of losing his foot and another year without an income. I don’t know how it is legal for them to sell products like this. This whole experience has left a bad taste in my mouth, and a system I once believed does not have my faith anymore. We have even had to deal with Canada Disability and they were no better. Comments my husband received from Canada disability ‘you can’t work in a kitchen in a wheel chair?’ and ‘you can sit at a desk and lick stamps.’ I feel we have a system set up to let as many people fall through the cracks as possible, and it is extremely disappointing this is allowed. Thank you for bringing to light at least one of the issues. Posted by: Christine | Feb 11, 08 11:58 AM
Action needs to be taken. Let’s start with the government. What I’d like to know is what type of insurance is being sold. If it’s not group mortgage insurance and the benefits that group pricing offer, it must be then a single case coverage – if that’s then the case, how can it be sold without being individually written? The Insurance regulator in Ontario needs to review this practice and perhaps adopt the same protection afforded to our cousins in Alberta. I suggest all customers with this bank type insurance coverage write to the issuer and demand protective action from both your elected officials and the regulator. In Ontario the insurance regulator is The Financial Services Commission of Ontario, 5160 Yonge Street, Toronto, ON M2N 6L9., 1-800-668-0128 or (416) 250-725 and/or The Honourable Dwight Duncan – Minister of Finance, 7 Queen’s Park Crescent, 7th floor, Toronto, Ontario, M7A 1Y7 1 800 263-7965 I’m writing to both and if all those who are effected do the same – things will change. Posted by: David | Feb 11, 08 12:29 PM
I work for the Customer Service department of a life insurance company who sells mortgage life insurance. I was just speaking with a customer of ours who wished to cancel their term life insurance coverage with us that they’ve had since 1994. When I asked why they wanted to cancel I was told it was because of your story on mortgage life insurance, that their coverage was “no good”. My protestations otherwise fell on deaf ears. At my insurance company, if an applicant makes a claim with 24 months of the policy being issued, we, as permitted by provincial insurance law, do verify the accuracy of their answers at that time. Since their coverage in question has been in place over 13 years, the benefit would be paid for ANY cause of death currently. Your viewer, our customer, under your inferred advice has cancelled coverage with my insurance company. I was wondering if they were to pass away next month if Marketplace would consider paying the benefit because my insurance company unfortunately will be unable to do so? Posted by: Mike Kennedy | Feb 11, 08 01:04 PM
The TD Bank got me too. I purchased mortgage insurance for myself and my wife. Had been paying for about two years. At the time I had been paying off my mortage [principal had decreased by 50%] and the premium had not decreased. I phoned to find out why. They said I had to phone them each time I made a lump sum payment to get the payments reduced it was not done automatically. I guess the lady slipped up because she made the comment that only my wife was covered and that they had sent me papers to complete two years prior and I had not returned them. So I promptly told the lady she could cancel the insurance on my wife because I could work and pay the house off if my wife dies. It was the insurance on myself that I needed. My advice to anyone paying Mortgage Insurance at the banks would be to phone and ask them to reduce your payment to reflect your current balance owing and to find out your coverage if both of you should be covered. Posted by: Sid | Feb 11, 08 01:19 PM
Shocked and upset by what I saw on your episode, I called TD Canada Trust right away. No one could comment on my concerns at that moment and I was told someone would get back to me the next day. They did but they still could not answer my questions. I asked the TD representative if she could guarantee that I was indeed covered by my mortgage insurance if something should happen to me. Repeatedly, she stated ‘as long as the information provided in my application is correct, then I would be covered and not to worry’. I told her that her comment made me doubt my protection further and certainly supported the points made by the Marketplace program. She passed me on to another person who yet again, tried to ease my mind and remind me that the program was one-sided. Interestingly enough, when I asked for the number of insurance claims submitted and the number of claims denied for last year, I was told that someone would get back to me with that information. I asked them why they would give that information to me but not to the CBC for their program; they had no comment on the matter. Their name is TD Canada Trust – how can consumers trust an organization who puts profits ahead of people. When my mortgage needs to be renewed in the next year, I will not be going back to this bank. I simply don’t trust them. Posted by: Kimberly | Feb 11, 08 02:37 PM
I have been a mortgage officer (among other things) for one the Big Banks for over 20 years (not TD, but I am not an authorized spokeperson, so I hesitate to name the bank). I have never been involved in a denied life insurance claim with any of my clients (I have seen a few disability claims denied for various reasons; in my opinion, good reasons). What MarketPlace didn’t talk about was; 1. the benefit of continued coverage, even after you may have been diagnosed. 2. level premiums regardless of age or term/amortization. 3. the premium benefit of never growing older in the eyes of the insurance company – buy a house at 25, get life insurance – on your 5th house at the age of 55, you are still priced as a 25 year old. 4. automatic coverage on many credit products for those who might otherwise not get insured anywhere (if you have cancer, but die in a car accident, the insurance pays). There are many other characteristics of creditor insurance that are worth knowing. Marketplace is correct about that fact that you must be informed, but don’t assume that because the companies providing you with your service are making money, you are getting ripped off. Term Insurance and Creditor Insurance are two entirely different products. Both can form very important parts of a financial plan. Get information, get advice, and do what’s best for you. Remember, Marketplace is in the sales business too (airtime); the more provocative and entertaining their program, the higher their profits. Posted by: D.F.D | Feb 11, 08 03:34 PM
It’s simple, you lie and you aren’t covered. Well I didn’t lie. But if you did not disclose everything you may as well have. The banks are not self-insuring, they are paying premiums to an insurance company who are denying the claims. Your best bet is to go directly to an insurance company that will underwrite (blood test etc) before issuing the policy. Then you can be almost positive (they can retract as well) you’re covered. Posted by: Chris D | Feb 11, 08 04:19 PM
I found your story on mortgage insurance extremely interesting. I am a life insurance broker and have been telling my clients about this very situation for years. Quite often my message is met with skepticism, “why would a bank do something like this?” is what I am asked. Clients have actually suggested that I was trying to mislead them in order to sell more expensive insurance. Posted by: Michael Theisen | Feb 11, 08 04:32 PM
As an insurance agent, my goal is to educate my clients on the difference between life insurance and credit protection. Life insurance is owned by you, the policy owner. Underwriting (collection of personal and medical information) is collected prior to issuing the policy, therefore at the time of a claim a payment will be made and further information is not normally required. Credit protection is owned by the financial institution and you have no control over when or if there will be a payout and under which circumstances. A bank will normally do the underwriting at the time of death or disability. This means they have an opportunity to challenge the claim if deemed necessary. Protecting your own interests and your family requires you to put in place a policy that is owned and controlled by you. A policy that will renew regardless of heath conditions and/or disability will allow you to continue providing a security blanket for those who depend on you when you need it the most. Talk to a licensed representative and find out what your life insurance needs really are. The individuals who sell credit protection at the bank are not required to hold any special licences so how can they be expected to provide advice in this area? As a life licensed representative, we are required to pass industry exams that show our competence to advise in these areas. You can find a list of licensed agents in Ontario by visiting FSCO’s (Financial Services Commission of Ontario) website http://www2.fsco.gov.on.ca/alias2a/agents.a2a. Remember not everyone will qualify for life insurance. Sometimes the bank or financial institution will provide coverage where an insurance company will not. I normally advise for individuals to accept the credit protection form the bank UNTIL your individual application is approved. That way there is no gap in coverage and the consumer has some protection which is always better then none. Posted by: V. Mitchell | Feb 11, 08 04:38 PM
I checked my policy on my RBC mortgage. It’s the same underwriter as this TD story and I just cancelled it. They will never get another dime from me. Posted by: Ryan | Feb 11, 08 05:12 PM
I checked the questions on my insurance for my line of credit. Previous to the 36 month time line on the policy questions, I had an operation for adhesions – knot in the bowel – but I answered no to the question because I have not had treatment since. Rereading the policy though, the question asks if I had ADVICE on stomach, intestinal or bowl problems, along with every other medical possibility, and I’m thinking, “of course” I have had ADVICE on how to prevent problems. That advise is probably on my medical file too which I’m sure Cumis Insurance will want a copy of if I die any cause, related or not. There’s the loop hole. I’m sure 99% of Canadians have had ADVICE from a medical professional on something. Is it in your file at the doctor’s office? Who knows. But that’s where the Insurance Company can find a way out of paying out your policy. Get rid of the insurance. I’m going to. Posted by: Nancy | Feb 11, 08 05:32 PM
Unfortunately your program hit it right on the head. I’ve been telling people this for years. Banks only want one thing: your money. There is a lot that you didn’t point out that makes a bad situation sound even worse. As a licensed (by the Province of Ontario) life insurance person the banks don’t do us any favours by offering this life insurance to people getting mortgages. People only have one thing on their minds when they go to the bank and that is ‘am I approved’. When they hear those words they are so happy they will do anything to get out the door before the bank changes their minds. I’ve talked to people who are so afraid that if they cancel their mortgage life insurance at the bank the bank will cancel their mortgage altogether. It is a scary situation. I rarely can get through a life insurance application with a potential client in under an hour especially with explaining the medical questions. You need to probe deeper to make sure that the applicant isn’t forgetting something that happened years ago. If they forget something and it jumps out at the insurance company when you make a claim the insurance company can deny your claim. There is a reason why we spend 9 weeks in a course and take the exam and pay a license fee. Of course that doesn’t solve everything but it is better than what the banks are doing. Posted by: Doug Stevenson | Feb 11, 08 05:53 PM
How horrible that this is being allowed to happen right here in Canada. I thought we had laws to protect our citizens. This legalized insurance fraud is something I thought could only happen in a 3rd World Banana Republic. What these banks and insurance companies are doing is unconscionable. We are definitely canceling our mortgage insurance; not one more penny of ours will go to a company that perpetrates this type of fraud on the unsuspecting. Posted by: Karen, Dartmouth, NS | Feb 11, 08 06:07 PM
I work for an insurance company and believe me I know the pitfalls of mortgage insurance bought through the banks. I do know that through our company life insurance is underwritten before it is accepted to make sure a client qualifies. One of the biggest disadvantages I think after it is purchased with a bank is that the more you pay into it, is the smaller the payout is and who gets the payout? The bank. With a reputable insurance company you name your beneficiary and the payout remains the same. If you purchase $200,000, it remains $200,000. If you qualified at year one for 20 years and then buy another home 10 years later you don’t have to re-qualify for another insurance policy. These are just some of the benefits. Also the people selling the insurance are licensed to sell life insurance and I know with the company I work for they are trained to sell the product best suited for what “you” need. They do a life assessment questionaire to find out what your needs are and how much insurance you need. I am studying now for my license and it is no walk in the park. There is a lot to learn. Posted by: KIMBER KENNEDY | Feb 11, 08 06:44 PM
This issue has become a frustrating part of my job as a financial security advisor. Many of my clients have come to me not fully understanding what mortgage insurance was when they signed and not seeing the possible dangers of having not read their policies properly. At the same time, many people do not see themselves in the category of people who will really need this protection as they see themselves part of the “it will never happen to me” group. The main issue, I believe, is that consumers are not made aware of the differences of all the different products out there as it is not always in the companies’ main interest. It is vitally important that consumers do their homework and become informed in order to protect what is most valuable to them, their families. I strongly encourage everyone to sit down with a financial security advisor who is licensed in all areas of financial planning. This way, you are guaranteed to have the best information and advice. My heart goes out to those who have been let out to dry and I hope that their wishes are granted. Posted by: Richard Watt | Feb 11, 08 07:35 PM
The test of eligibility for insurance should be whether or not the buyer was healthy enough at the time of purchase to rightfully expect legitimate coverage. As to the issue of incorrect information on the form, that should be outweighed by the fact that: a) Any ambiguity within any contract is meant to be construed against the writer, especially when that ambiguity is blatantly deliberate, because the writer controls the content. b) The insurer is responsible for its agents, and therefore should be responsible for the misinformation those agents use to push sales. The test of post claim underwriting should be: What has the inherent deception involved in post claim underwriting cost the buyer? Your lawsuits should claim the loss of the payout, on the basis that the insurer’s deliberately dishonest façade of insurance cost you the ability to see that you were uninsured, which deprived you of the opportunity to insure yourselves properly. Regardless of whether or not they would have insured you; if they had not deliberately, and elaborately, led you to believe that you were insured, you could have found insurance elsewhere. The practice of post claim underwriting should be illegal, and I expect it would be, if we were not governed by corporate puppets. Good luck with your respective fights! Posted by: Lisa Smith | Feb 11, 08 08:31 PM
Thank goodness I am cheap and generally don’t trust banks to begin with! When my husband and I bought our first home 4 years ago, we declined any mortgage insurance through Scotia Bank – we have a large life insurance policy already. They didn’t make a fuss about it BUT we were told we HAD to purchase Mortgage Default Insurance from Scotia, through CMHC, for what is called a high ratio mortgage(less than 5 % downpayment). I think that was a $3500 cash grab. Our initial mortgage is only 2 years wage for my husband – but we were told we wouldn’t even qualify without paying for this coverage. Anyone heard of this before? Posted by: Lisa | Feb 11, 08 08:51 PM
Listen all, make sure that you get LIFE insurance and NOT mortgage insurance from your bank. This is why: mortgage insurance from the bank essentially amounts to insurance on a declining balance…if you have only $1 left to pay on your mortgage when you become sick or die, only that $1 is paid off BUT with life insurance, the amount you apply for is the amount you get, REGARDLESS of whether your mortgage is paid in full or paid in part….and the premiums can be almost identical! Wish BMO actually told us that when we bought ours. But thankfully our financial advisor and insurance rep taught us the truth about this bank ‘scam.’ Posted by: Shereen | Feb 11, 08 11:15 PM
As a Financial Consultant I have been sharing this information with my clients and future clients. I am glad to see there was this program done on this issue because as soon as a TV program is done people start to take these issues seriously. Posted by: Darrel Pendry | Feb 11, 08 11:43 PM
Consult with a Broker! In most cases, we make it more affordable and you know what you are getting in the end. We have a story right out of our back yard at our Firm in Edmonton. An ex RCMP officer’s family lost their home and was denied insurance, due to the Bank’s refusal to pay out a policy. This is happening at an alarming rate in all areas in Canada. With no underwriting, or medical qualifying, it is easy to go back and create a case that info had not been divulged. Based on research involving thousands of life insurance offerings by various companies, and Brokers, in almost all cases, life insurance purchased, when meeting with an independent licensed life insurance advisor, likely costs less and provides better value and service than when purchased through banks, or any other lenders, either through direct mail, or Internet. Posted by: Graham | Feb 12, 08 12:45 AM
I have read all of your comments and am so worried about many of you. The bank has made you a promise. Take the time to make sure they mean it NOW rather than later. I have found that most dead people have a very hard time defending themselves and loved ones are not the ones to do it for them. These things should all be perfectly clear before it is too late. Call any insurance agent and we would all be very happy to help you to fully understand the differences between insurance from a bank and an insurance company. Also, remember we have to have a licence to do what we do and no conflict of interest when we offer you a life insurance policy. Knowledge is power so get informed. Posted by: Christine Hobden | Feb 12, 08 09:01 AM
This can be easily avoided. Take this responsibility into your own hands. Get your own personal life insurance, which may even be cheaper. Then it is always with you (if u pay for it) no matter how many places you move to AND it doesn’t JUST pay out a mortgage, it pays out the full value and your beneficiaries hopefully can pay out all your debt. Posted by: Sheri | Feb 12, 08 10:48 AM
I am also a victim of the TD Insurance. My husband passed away July 2/07 and his claim for life insurance was declined. He was only 62 and had a massive stroke. The Insurance said he lied on the form, indicating he did not have heart problems. We did disclose he had high blood pressure and high cholesterol. We did not know he had a heart problem, that was not shared by the Doctor or any physical signs. He did not take medication for any heart condition. We also disclosed that he was a smoker. We were told by the Bank not to worry everything would be ok. They took high premium amounts from our bank each month. We assumed we had insurance. We did not expect anything to happen to either of us. But it did. I think it is time all of the TD Insurance clients get together and file one big Class Action Suit against the Bank and Insurance Company. Enough is enough. Who do they think they are? We applied for insurance, paid insurance only to find out we did not have insurance. Who is defrauding who? Posted by: Lynn McGregor | Feb 12, 08 12:16 PM
We bought Mortgage insurance with the Royal bank and a nurse came to our house to test us (blood, urine, loads of questions) to see if we would be accepted – however the underwriter is Canada Life. Your documentary made me very skeptical of what we signed up for and we will go through our policy with a fine tooth comb. One thing that shocked me was that you can be declined for a mammogram or a blood pressure test? What adult who goes to their doctor regularly and hasn’t gotten their blood pressure tested? What a scam. The insurance companies should be ashamed of themselves. Unfortunately there will always be those people who didn’t see this episode and won’t know to cancel their polices and will be scammed when they need help the most. Thank you Market Place for continuing to open our eyes to these sorts of scams. Posted by: Susan | Feb 12, 08 12:19 PM
I find it ironic that last summer a close friend of my husband passed away. It took TD and the insurance company far too long to deal with the claim and interestingly enough as once the TD knew a lawyer was involved they agreed to make partial payment but not full as they stated the health questionnaire was incorrectly completed by the deceased. Imagine the tragedy in loosing a spouse and the having to fight for them after they are gone. My friend needs to fight this bank to the bitter end for full restitution. Posted by: shelley | Feb 12, 08 12:26 PM
Bottom line is get a Life Insurance Policy large enough to cover your mortgage. The mortgage insurance is only good for as long as you pay for your mortgage. Mortgage paid off, no insurance. With Life Insurance, you have it for as long as you live (pay your premiums). The mortgage insurance is a total rip off. They know that the chances are greater that they will never have to pay a claim. It is “easy” money for the banks. Posted by: Jennifer | Feb 12, 08 01:39 PM
I too am a licensed (yes licensed by the Provincial Govt. board) independent insurance agent. Our company and and those I represent go to great lengths to ensure we do not oversell clients. Most importantly we do the underwriting (evaluation of risk) prior to putting the insurance in place. That way the insurance company accepts the risk and pays out the policy accordingly providing there has been no attempt to defraud. The key here is get the underwriting done FIRST before the contract is placed. Most of us in the industry have been aware of this fraud for a long time. I advise all my clients about it but the banks have a much stronger voice than I and would squash me like a bug if I got in their way. Great piece. Millions of people should thank you. Now I can just refer them to your web site. Posted by: Kenn Wilson | Feb 12, 08 02:04 PM
I am an independent broker in Alberta and do my best to explain to prospective clients the differences with insurance products. Unfortunately some people still choose the banks’ products because they will not have to undergo the underwriting process. Bank salespeople are easy with promises of guaranteed coverage, but they are not personally accountable for their statements, and the consumer is unlikely to deal with that same person in the event of a claim. Everyone engaging in the sale of insurance products of this nature should be licensed, and should provide full disclosure to the consumer of who they work for, and how they are paid. The agent’s name and information should be included in the application, as they could then be named in any lawsuit arising from a denied claim; and held personally accountable for their role in the application process. Posted by: Norman Wiebe | Feb 12, 08 03:21 PM
Wow. What a one sided commentary! Did you ask how many claims were approved by TD Bank? Did you ask Insurance companies who had their policies sold by licensed Insurance reps, how many of their claims were denied? It is so Canadian to bash the Banks, I guess it is in our nature. I lost my wife 18 months ago and her credit line was insured with TD. TD was great to deal with, made my experience comfortable given what I was going through. They paid the claim in full without question. I am a strong believer in TDCT. Stop bashing the banks until you have all the facts. I do not think you do!! Posted by: David | Feb 12, 08 03:46 PM
The day after this show aired we cancelled our mortgage insurance with TD..the guy on the phone asked why and i said “MarketPlace” he didn’t ask what I meant by that comment so I assume quite a few people did the same. I’m surprised we didn’t realize that getting insurance shouldn’t be that easy ugggh so much wasted money! Thanks Marketplace! the only thing I wish they had added to the show was that TD isn’t the only bank doing this, so just because you’re with Scotia Bank does not mean you’re any better off. Posted by: Lisa | Feb 12, 08 03:54 PM
Wow, talk about a ‘snowball’ effect! Forums like these go a long ways in promoting so much mis-information from mis-informed and uneducated people. The keys here people are mis-informed and uneducated. The Marketplace piece is presenting a point of view and I’m sure we can all sympathize with anyone who is treated unfairly. The number of life insurance specialists on here promoting ‘their’ insurance is certainly entertaining albeit a partisan point of view. Do yourself a favor, go brush up on the different types of insurance offered, the different distribution channels and the benefits each offer. Insurance (including mortgage and other types of creditor insurance) can play an integral role in YOUR AND YOUR FAMILY’S financial plan! Posted by: Dick | Feb 12, 08 05:45 PM
I think a lot of people are misunderstanding part of this. This is not just TD bank. Almost EVERY BANK offers the exact same product. Creditor insurance is the same with any company! I currently work in the insurance industry and I have aliances with mortgage brokers that offer very similar forms of “Mortgage protection”. Car dealerships, credit cards, loans, lines of credit and mortgage insurance is all in the same boat. It doesn’t matter what lender or what type of lending product it is, the insurance they offer is garbage. I used to work for a bank, so I know both sides of the coin on this. Any insurance that is offered by someone that is not a licensed professional should raise red flags. Banks were created to lend people money. They weren’t created to handle investments, they weren’t created to sell insurance, they weren’t created to help people succeed financially. People should not be going to these people for good financial advice. Go to a fully licensed professional who can critically analyze all the products available to you and make a decision based on that. Posted by: Chris | Feb 12, 08 08:25 PM
I am quite disturbed by this report. We are a young family with a mortgage on which we took life insurance 5 years ago. The insurance company even sent a nurse to do some basic testing. I am now concerned that maybe we are not covered as we thought. We will look into term insurance but how do we know who to trust? Posted by: Sonia | Feb 12, 08 08:28 PM
People should NOW know that they have several options rather than Bank Mortgage Insurance. They can shut down their Mortgage Insurance, get Term Life insurance that has medical approval upfront and pays off on death, or put the money in an RRSP that gives free interest and tax breaks. And most of all learn to treat banks with the same suspicion we have for a door to door solicitors. Posted by: Ivan | Feb 12, 08 09:19 PM
Thank you for this great story. I have a follow up question, should you get around to it. Let’s say you have seen this program, and are aware of this long question which everyone should answer “yes” to (if you have had a regular checkup in the last 24 months). Yes I have been tested for cancer, had my BP checked etc. Would the bank employee then try to say “oh well a regular doctor’s checkup doesn’t count”? Thank you marketplace for encouraging me to read all of that fine print, and helping me to interpret it! Posted by: Sean | Feb 12, 08 11:17 PM
A basic rule in business forbids the practice of tied selling — that is, refusing to provide one product unless the client also purchases a second product. In the past, when applying for credit with a credit union, I was told that they would only provide me with a car loan if I also purchased life insurance. When I said that I already owned life insurance, sufficient to cover the loan, and even suggested that I could assign the policy if they chose, they refused to provide the loan. I have always wondered if this was ethical, or even legal. Posted by: Joanne McDowall | Feb 13, 08 11:33 AM
My husband and I got a Homeline Plan through the Royal Bank.A few weeks later we received a letters from the bank telling us we qualified for life and disability on our mortgage and also our line of credit. Unfortunately I became very sick. after all kinds of blood tests and a chest xray and an ecg showed my heart was very enlarged.The doctors told me I had heart failure due to a virus that attacked my heart. after six months of restricted fluids and no salt diet and heart medication and also having an icd implanted, In February they told me I would have to get a heart transplant. Up until I got sick I was a heavy duty equipment operator driving a 30 ton rock truck and also drove a frontend loader plowing snow for six years in Whistler.B.C. When we filled the forms out at the bank one of the questions were in the past 24 months have you had any neck or back problems. I told the loans manager I had a disc removed in my neck. Her exact words were “you are working write now aren’t you? So I wouln’t worry about it.” So I checked the no box after all it was years before and it didn’t stop me from working. In December after applying for the disability insurance Canada Life told me I was denied because of my neck surgery. At the time when we bought our house in 1998 we got the insurance for this reason just in case one of us got sick. Now I have been denied for the disability insurance. I have been so sick my heart is so weak only working at 20% and stress is very hard on my heart. I can’t believe that a big company like Canada life would even do this after taking our payments out every month. I have been so upset over the whole thing. I am waiting for a heart transplant due to a virus, something I have no control over. Posted by: wendyreigh | Feb 13, 08 11:41 AM
Regarding Remo Zucatti’s post on Feb 6th: Yes, the insurance industry has a shameful history of dishonesty, neglect and questionable sales techniques. However, one must also take into consideration the numerous companies and advisors who pride themselves on loyalty and customer care. I am new to the insurance industry and was NEVER “assisted” to pass my life licensing exam, nor was I given any distasteful sales tactics. I am proud to be an insurance advisor. Likewise, I am glad that Marketplace shed light on the very type of insurance I have been encouraging my own clients to avoid. This episode proves once again that buyers need to beware, do their research, and find a broker or advisor who will work on their behalf and not for their own pocketbook. Posted by: Jessica Deachman | Feb 13, 08 12:36 PM
I entered the Life Insurance business in 1980. For a short time in the early 2000’s I was persuaded to join a major bank and learned first hand the bank’s view of insurance as a “profit centre”. This product was marketed very aggressively but I always recommended the client contact their insurance broker. As the bank constantly monitors the percentage of your loans that are insured I was also doomed. It was a good thing when I was let go without a reason after my 3 month probation. The major banks and all those that push this product should be brought to heel. Some states in the US already prohibit “post-claim underwriting” and Alberta is investigating the problem. Caveat emptor! Posted by: Ken Poste, CLU | Feb 13, 08 12:44 PM
I happen to work for a bank, and would never sell a product that I don’t believe in. I have dealt with many clients going through claims, and have never had one of my own clients declined. I happen to know that the backing insurance company paid over a Billion dollars of claims in 2007 and less than 5% of claims were denied. You can put a negative spin on any story if you wish, but why don’t you ask the young mother of 2 that just lost her husband to cancer how she felt when all her debt was paid in full? Posted by: Nina | Feb 13, 08 02:50 PM
“PROTECT YOUR INSURABILITY” – Yes, Hats off to CBC for exposing this once again!. There is another very important risk that a lot of consumers will be exposed too if they do stay the course with mortgage insurance at the banks – “Insurability”. As a lot of consumers these days will be refinancing their mortgages or renewing them with another institution (every 2 – 5 years, for example), they are placing themselves at risk once again, having to sign a brand new application and having to DISCLOSE ALL new health issues since birth, again. If there was a serious health issue within the past, underwriting on health issues change in time as we all know, which could result in adverse underwriting, thus jeopardizing or challenging the insured’s insurability when requalifying for new mortgage insurance through the bank, let alone trying to get a standard issue on an individual Life Insurance policy through a licensed advisor. By purchasing a permanent Term 100 product or a temporary term 10, 20, or 30 year policy (with automatic renewals up to age 80), this will NEVER happen – NO worries in qualifying every 2-5 years with any new health issues you may experience. Once the policy is issued with all health issues above the table, any new health issues that occur after will not affect your insurability whatsoever. If coverage is needed beyond age 80, as we are living longer now due to better health and medical technology, consumers may take advantage of a conversion option (up to a certain age, usually age 71) that they have been paying for since inception, and convert their term policy WITHOUT MEDICAL or ANY EVIDENCE OF INSURABILITY to a permanent plan to age 100. Again, the consumer’s insurability is protected by an individual policy. As a licensed advisor, it has always been a “rule of thumb”, to recommend to the consumer to purchase an individual life insurance policy, besides what they have at the bank or at work (group coverage) – “PROTECT YOUR INSURABILITY”. Posted by: R.G. Harrison – Ottawa, Ont. | Feb 13, 08 03:29 PM
Some great questions comments and answers here. Like many that have weighed in on this subject I am an insurance agent. People need to always be aware of what products they buy and from who. I would always tell anyone who is worried about a product they have purchased to get another opinion. If you go through testing such as seeing the nurse having blood taken and such then normally you are on much more sound footing. A few years ago my niece’s husband died at the age of 24. This was a tragedy and my niece was almost 8 months pregnant at the time. He had purchased a policy 11 months earlier from me which paid out without problems. When we discovered there was mortgage insurance through the bank I applied for it and was almost immediately turned down. It happens that he had suffered from depression for 3 months or so when he was a teen. Long story short after hiring a lawyer and fighting they paid but what terrible thing to go through. If I said this once I’ll say it a 1000 times only insurance companies are insurance companies. Anyone getting a mortgage needs to shop around for insurance and at least have some idea of the company’s reputation. Posted by: Robert Brennan | Feb 13, 08 03:51 PM
I’m a full time Financial Advisor at BMO for those who are wondering. This story about insurance is flawed. CBC marketplace made an unfair attack against TD Bank. The story was also one sided. The clients are given time to review the insurance application and ask any questions they might have before signing. Also the clients are not forced to take the insurance – it’s up to them if they decide they want it or not. CBC should have also aired families that have had their mortgages paid as a result of terminal illness or death from mortgage insurance. There are a great deal of clients who have received payouts from their mortgage insurance that are quite satisfied with this product/service. Shame on CBC for targeting just one bank, and shame on them for showing one side to this story. If Canadians actually buy into this flawed story then I guess that doesn’t say much about us. TD is a great bank. Everyone should bank there and all those people who are tired of the big five, well then take a hike and go to one of the small banks/credit unions. Let’s see if they can provide you with the same service, let’s see if they have good investments. Lets see if they have long hours, and convenient locations – well the truth is they don’t. And in the long run you end up hurting yourself by thinking you’re standing up for what you believe and banking in some small crap bank/credit union. You’re not hurting the big five you’re just making your life harder by banking somewhere else. Posted by: Jennifer M | Feb 13, 08 04:09 PM
I have read with interest comments or should i say horror stories relating to banks. I have one which involves CIBC and loan agreements. These institutions push hard for the customer to get loan protection in case of job loss and the customer pays a service charge monthly for this “protection”. What they do not tell you is in the event of dismissal (verified or non verified) the customer’s loan protection is revoked! I found this reprehensible. Posted by: Ron | Feb 13, 08 05:18 PM
I tuned in in the middle of this segment, and at first I thought I was watching a repeat of the show on vehicle loan insurance. Some of us aren’t the quickest learners, but should we have to hire a lawyer before signing anything/everything, with supposedly reputable corporations like banks? Posted by: Hu | Feb 13, 08 08:02 PM
Now that this “scam” has been revealed, where are the regulating bodies that are responsible for dealing with it? When will they step up to the plate and take a solid and credible leadership role? This tragedy is simply too big and too broad to expect that each Canadian mortgage insurance policy holder is able and has the resources to successfully fight “corporate forces”, especially if that family is already in crisis! There is an ombudsman for the Canadian banking sector – where is his voice in this? Posted by: Patricia | Feb 14, 08 10:51 AM
After viewing this video, first, my heart goes out to all the families who have to suffer losing a loved one, and second, have to suffer through denied claims, and insults to create more of a burden on their lives. These companies say that it is the customers who are defrauding them, when in actuality, it’s these companies who are defrauding innocent peoples’ lives. My parents just bought another house, and I will be showing this video to them so they can see how some companies really operate, and if they have been through a similar or exact situation. Going back to a comment on top, its true, when it comes down to it, it’s all about money, and it seems that is what the world is all about today. This video is significantly informative, and am happy to see it has opened a lot of eyes, mine included. Getting insurance shouldn’t be that easy, and when they say something seems too good to be true, it probably is! Posted by: Domarina | Feb 14, 08 02:12 PM
I’m always disappointed when my clients, whose home I insure, decline my offer to review their life insurance needs. I make my service available free of charge – it’s what I do, and I never brow beat anyone into buying a life insurance policy. It is my clients’ responsibility to know what their priorities in life..and death, are. Even after I have explained to some of my clients the advantages of taking out a personal insurance policy through a licensed life insurance agent, such as myself, they will still decline my offer to provide them with options or information. The biggest reason most of the clients keep giving me is “I don’t want to go through all those medicals questions and exams, and the bank is $10.00 per month cheaper”. Now I can show them the risks they may be taking will cost them more than $10.00 a month. The reason my company, medically underwrites upfront, is so that when the time of need is there, I can go to my client with a cheque, not excuses. I have delivered such claim cheques to clients during their most difficult time, and I feel good, and proud to be an an insurance agent. To blame all insurance companies, just like blaming all banks for the business practice of a few is unfair. Consumers need to ask better questions, and read what they sign their name to. A good insurance agent will not hesitate to answer your questions, and will admit when he or she doesn’t know the answer to one. Most banks do not have life licensed agents selling the mortgage insurance. Mortgage insurance is designed to protect the bank, not the consumer. I hope this report will encourage consumers to ask the tough questions of the lenders and mortgage brokers when it comes to mortgage insurance. After all who needs financial protection protection the most when a loved one and/or income earner dies, you or the bank. Educate yourself people. Posted by: Carlos Brand | Feb 14, 08 02:54 PM
As a former bank manager of 15 yrs, I have always advised my friends and family against purchasing all insurance products sold by the banks, these include mortgage, loan, lines of credit and Visa’s. Besides the horrors documented in your program, which I have witnessed, the banks’ insurance monthly premiums far exceed the insurance companies’. My advice, it’s worth the time to see an insurance agent it could save you thousands of dollars and lots of heartache. And just for those doubting bankers reading this, no I don’t work in the insurance or financial industry. Banks are promoting their on site “Financial Planners” and many have their CFP designations, so its time these people act responsibly and with due diligence to look deeper into the issues raised in your segment prior to recommending these products to their clients who are putting their trust in them! Posted by: Kelly | Feb 14, 08 03:26 PM
Truth is Banks are the worst option for insurance. They make huge profits from their overpriced loan and mortgage protection plans. As your mortgage is reduced through your payments, your premiums don’t go down. I confronted my Bank Tuesday about their mortgage insurance after reading online about “denial of payments” and after listening to my client service professional downplay what was stated quite clearly on the website I said to him “So you are telling me that you have mortgage protection through the bank as well?” and he told me “That’s not what I’m saying at all, I used to be a licensed insurance agent and so I sold myself a policy”. If the bank’s insurance product was any better than the one he had sold himself he’d have switched I suspect. But it isn’t, so he didn’t. They sold me a crappy mortgage insurance and crappy line of credit protector. It was never fully explained to me, or the ramifications of the type of policy, I was never advised to get quotes or have a professional review what I was signing, and BECAUSE I TRUSTED THE BANK , I signed on. Now I am furious, I feel defrauded, stupid, used, tricked, gullible, vulnerable, disrespected and most of all – determined. I’m going after that bank for my premiums, if I have trouble CBC will, among others be notified so they can come along for the ride. I’ve got lots of time to help keep this story alive. Now is the time for all affected Canadians to rise up, demand answers from not only the banks but also from the federal government as to why unqualified people are selling sophisticated insurance policies that are extremely risky, to people who can least afford the policies to fail when they need them most. Underwriting policies at the time of a claim does not protect homeowners! Start calling, make noise. I am. Bless you CBC, Wendy and Erica. Finally, the smoking gun. So, Jennifer, thank you for your thoughts. But as the TV commercial says “I’ve got bankers”. And you’re now preaching to the jaded. Posted by: Peter in Hamilton | Feb 14, 08 06:16 PM
This is in response to the previous query. When you apply for “personal life insurance” the testing done by the various companies that are used to collect your information put your samples ie: blood and urine, through a series of tests that by far exceed your normal doctor’s visit. The bank MAY come back and say that you were never checked for that particular ailment that is in question. Also, this also pertains to the Car loan life ins, the credit card life ins and all those other “post death underwritten” types of insurance. The best advice I can possibly give is to get your own private insurance from a licensed insurance professional. It is generally cheaper for more coverage and is far superior in all aspects. There are a host of other benefits as well but I’ll leave that up to your broker to explain. Posted by: Richard Wahl | Feb 15, 08 11:14 AM
I don’t purchase insurance of any kind unless obligated by law. I don’t buy mortgage insurance, credit insurance, life insurance, extended warranties, nor car rental insurance. I get some free life insurance as part of my group benefits at work. There are no health or reporting requirements for it. Premiums collected are always greater than amounts paid. So anytime you purchase an insurance product there is an expected loss. So the only insurance you should ever consider is the type that covers you in case of a significant monetary loss. When signing “trick contracts”, I always prefix my signature with “To the best of my abilities, “. Most of the time it’s for things like credit cards and phones, but no one ever questions it. I know, you might wonder if your contract will be accepted, but quite frankly, why bother signing at all otherwise? Posted by: Ryan | Feb 15, 08 12:16 PM
It never seems to amaze me that as so called professional journalist you have always reported only one side of the issue! Credit Insurance has been around since 1917, something you would not know, because you do not take the time to throughly investigate an issue! And how about all of the clients that did have their Mortgages paid out, you sure neglected to report about them! Shame on you ….. Now because of your program, many Families will not purchase this valuable insurance and will be left with a Liability they may not be able to handle! Again Shame on you. Maybe CTV should do a program on your Poor reporting practices! Posted by: Will Slattery | Feb 15, 08 01:04 PM
I work in the financial services industry and have explained to my clients that mortgage/credit life insurance industry is not a guaranteed product. I am also insurance licensed and offer them a low cost Guaranteed term life policy. I always new that mortgage life insurance was not a great product. After watching the broadcast I asked a few other agents about their client’s experiences with trying to get a payout on the mortgage life insurance through the banks. Unbelievable how many have been declined! Posted by: Mo | Feb 15, 08 03:55 PM
I have TD Life Critical Life Insurance policy and I can not even get through to any agent to talk about my policy. Hire more personnel so that we can have some answers? Posted by: angl | Feb 15, 08 04:41 PM
For those individuals who wish to make formal complaints then the Ombudsman for banking services can be contacted at toll free 1-888-451-4519 or email us at ombudsman@obsi.ca This independent government agency has in recent months taken a stronger and ardent position regarding complaints directed at the major financial retailers – it’s worth the effort if you want to see changes made in the market place – seating back and letting somebody else do it for you is a copout. It’s suggested that you also contact the individual at the financial institution who would also carry such a title. In regard to TD it’s David Fisher at td.ombudsman@td.com Posted by: David | Feb 15, 08 05:37 PM
Supplementary to my comments on Feb 9, I must point out that mortgage insurance ends, not only the “burning of the mortgage papers” but also also on the sale of the property. Statistics tell us that a family moves roughly every 5 years and thus would need to qualify for bank sponsored insurance at every move. Since INSURABILITY is crucial, the homeowner may well have a health problem at a subsequent change of his/her residence. In short, mortgage insurance is not portable. Personal life insurance is owned by YOU, and will go with you from home to home and protects you with the agreed upon level, not diminishing, of coverage. There really does not seem to be an honest case for mortgage or creditor insurance. Posted by: Leonard Vis, CFP, CLU, ChFC | Feb 16, 08 11:20 AM
After reading these comments I realize how pathetic and co-dependent people are in Canada, Please TAKE SOME RESPONSIBILITY! Banks are a Business and what type of business would not want to introduce products that generate income? If you have a problem with them making money then go out and buy some shares and the dividends alone will cover any costs you’re not happy paying. Please read documents and ask questions, and stop blaming large capital companies for your laziness people. Also MTG insurance through banks can be pre claim underwritten…….JUST INTIAL X OR CIRCLE YES TO THE QUESTION THEY ASK! CBC is simply selling a story to viewers so they get people watching which translates to what? oh ya PROFIT. Wake up Canada and realize this type of journalism is pathetic! some people who have commented should really wake up. Posted by: Sandy S | Feb 16, 08 12:11 PM
Thanks for this informative article and videoclip My heart goes out to the ones affected People don’t read their application forms, and sign where they are told to sign, and even after getting their policies they don’t read the policy, because its too bulky and of course its legal language, so they lock it up in a safe/locker and sometimes don’t know where they’ve kept it! Even the life insurance industry sells Whole Life / Universal Life polices with a component called Cash value(which is supposed to be a savings and a great selling feature for the agents) however the insured’s beneficiaries will be surprised to know they WILL NOT get the combination of the Cash value and the Insured amount, because that’s the CASH SURRENDER VALUE, which means you get it on surrendering the policy. So you can either keep the policy or surrender it and take the cash value. It’s like the old saying, “You can’t eat the cake and have it too”. Maybe, you could interview some life insurance companies or do a questionnaire for the life insurance companies and ask them if their agents tell the applicants/insureds that their beneficiaries will not get the “Cash Value” in addition to the insured amount. Posted by: Alwyn Fernandes | Feb 16, 08 02:12 PM
Prior to being a licensed advisor in the Life insurance industry, I too held Mortgage Life insurance through my lending institution. Without asking too many questions, I agreed to Term insurance through one of the largest insurance companies in Canada…mainly due to it being less pricy. Shortly after becoming licensed, I was grateful I had met a licensed life advisor and accepted his recommendations regarding my life insurance needs. And although having a mortgage paid off is nice if it is approved, most people would rather choose how to spend the benefit money. The bank is the beneficiary with their insurance. Choose a plan where you name the beneficiary, and let your family decide if they would rather pay off the mortgage, or use the funds for other needs. ie: education, investing, monthly expenses, etc… Posted by: John | Feb 17, 08 01:38 PM
Reading through all of this, there is no insurance that will pay anything off easily when the loss to them is so large. It’s not just Mortgage insurance that does this to families it’s all insurance. Our home was fully insured by the Co-Operators Insurance. We lost our home to fire in March of 2005 and have not been paid a penny. We had two young children and this emotionally and financially destroyed us. Our funds have run out for a lawyer to fight any longer. The truth is they always win. Insurance is to protect us not harm us in our worst and most vulnerable times but thats when they strike and hurt us the most. What are we to do? Posted by: MIKE FORSTER | Feb 18, 08 12:17 AM
As someone who has always educated families on the pit falls of mortgage and credit insurance, this show helps secure that fact precisely. Keep going. As well as mortgage insurance, money is sucked out of families pockets by insurance companies selling whole life (cash value) policies instead of expert recommended term. An unbiased report on this would open the eyes of unsuspecting families who were pushed into a poor product using money hungry sales tactics. Posted by: Trevor | Feb 18, 08 08:27 AM
As many others I reacted to the Marketplace show regarding mortgage insurance with some measure of anger and alarm. I also called with the intention of canceling my mortgage insurance but rather than act on impulse, and knowing CBC’s proclivity at times to make the facts fit the story, Ii asked to speak to an underwriting agent. I had a very inetesting conversation with a somewhat frustrated person. She was very upset with the story and stated that there were many facts left out and the slant was so biased as to be misleading for consumers. Main assurance I got, and that i will receive in writing, was that if i told the truth on my original application I would be covered. End of story. TD Canada Trust does not do Post-Claim Underwriting. Their policies are all underwritten at time of signing. TD Canada Trust should be taken to task for letting this story pass with out vehement opposition but, I was told, there was no will to fight what they thought was a media battle with a corporation that is not in the business of admitting mistakes. Their PR people need a lesson in handling this type of incident – or TD Canada Trust needs new PR people. I notice in the note above that you state: ‘By submitting your comments, you acknowledge that CBC has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever.’ I trust you will not select parts of this letter that can be used to support your story when in fact I am asking you, as a publicly funded company, to go back on the air and clarify your facts and admit any misleading statements you may have made. And I do mean on the air – publishing a retraction or apology in a seldom heard of corner of your website does not constitute retraction. Thank you for your time. Posted by: Frank Ricketts | Feb 18, 08 09:26 AM
I call upon all employees who are expected to assist the banks in stealing from the customers to stand up and be counted. You are participating in something that would be illegal if it was any corporation other than a bank doing it. Can you live with it? Or will you stand up for what’s right? You all have the most power right now. Help the working folk of your country get treated fairly! Posted by: stace | Feb 18, 08 01:12 PM
Finally someone broke this story in a big way! As a licensed insurance agent, I know we have been fighting this in our industry for years. Good job on the investigative reporting. I will be passing this link on to everyone I know. Get yourself a properly underwritten policy and avoid this from happening to you. Posted by: Don Dickie | Feb 18, 08 06:16 PM
I think that the banks should be protecting and educating their clients much better than they do. That’s why I refer my clients to my financial advisor. Posted by: Brad Wadden | Feb 18, 08 10:33 PM
Thank you to CBC for another great story exposing the corrupt world of “go ahead and pay for coverage, but don’t expect to collect if you need it” that the banks are endorsing for “the protection” of their customers. It was nice to know we are not alone in our fight with Canada Life for 3 months of coverage for a slip/fall and break injury that left us with a prompt DENIED letter with the return of our paid premiums in a check from the RBC. We did not cash this check as we continue our fight with the the RBC and Canada Life and we are within our rights for the coverage. They claimed a “grasp at straws” reason for the denial and we are not giving up because we are well within our rights for our claim to be honoured. I hope the cbc and Canadians don’t let this story end without further action to those that are taking advantage of those of us who trusted we were covered. Posted by: Derek Sinai | Feb 19, 08 12:13 PM
A very worthwhile examination of the reality of what “mortgage insurance” really is and isn’t. However, there is a simple solution. The regulators only need to insist that any such application bear the following inscription in BOLD RED Capitals: NOTE: YOU DO NOT HAVE INSURANCE PROTECTION UNTIL WE INVESTIGATE YOUR HEALTH SITUATION AND VERIFY YOUR ANSWERS TO THE FOLLOWING QUESTIONS. One can only hope someone in the position of authority and accountability will step forward and do what is right, including someone within the banking circles as this situation is not limited to just T/D. All banks operate on the same fundamentals when creditor “insurance” is offered. Posted by: R. Harvey | Feb 19, 08 04:55 PM
As a Licensed agent in Newfoundland and Labrador I applaud CBC Marketplace on their investigation. Since airing, when I sit with clients, I take an extra 20 minutes and watch the video with them. Instant recognition to the fact that it is important to speak to a Licensed BROKER in the insurance industry as they have access to many companies, where as ‘career shop’ insurance companies only have one product which tends to be pricey. Shop around for best service! Posted by: Rick Wheeler | Feb 21, 08 08:39 AM
I would like so very much to have a personal conversation with Ron and his wife, as well as with Leanne Santos. I may be able to lend some support because in year 2005 TD Insurance “tried very, very hard” to disqualify my mortgage insurance claim. They spent almost a year harrassing me while I was in the most intense grief over the loss of my husband; they did absolutely everything they possibly could to renege and deny funding my claim. Only by the “grace of God”, and those whom He sent to me, did I win. Please, please, please contact me as soon as possible. caring and sharing, with much aloha, Rosemary Denniston Posted by: Mrs. Rosemary Denniston | Feb 21, 08 01:59 PM
The best advice I can give to everyone is not to cancel your mortgage/line of credit insurance until you have applied for coverage with a licensed Life Insurance Broker. Ask for 3 quotes from 3 different life insurance companies so you can compare the costs and know that the agent is working for you, not the insurance company. In addition to this, your life insurance advisor should explain to you the differences between the costs and benefits of each company which will allow you to make an informed educated decision. As for Connie’s question as to whether or not they would qualify for life insurance due to medical issues. Why don’t you contact a licensed life insurance agent, complete an application and allow the underwriters to determine if you are eligible for life insurance. The fact that you have medical issues, but controlled by medication does not necessarily indicate you would not qualify for life insurance. In 2003 two individuals met with me to replace their mortgage insurance they had purchased through the bank with personal life insurance, a savings of $350 a year on premium costs. In 2004 she was diagnoised with cancer and unfortunately passed away in on Jan 4, 2008. The surviving spouse provided the insurance company with a death certificate and a physician’s statement outlining the cause of death. This was submitted on Feb 1 and the life insurance death benefit of $300,000 was settled and deposited into his bank account on Feb 8. You need to ask yourself is it worth taking the chance that you might be covered through your lending institution or take a couple of hours out of your day to get the necessary coverage to provide you with the peace of mind we all are seeking. Posted by: Mary | Feb 22, 08 09:56 AM
I have been reading these comments for a while now, and I have to address those few of you who complain of this “one-sided” story. Did you even watch it, or do you work for TD, and don’t like being exposed? The banks were asked to comment on the practice, and they declined. They were asked to provide Stats on the number of claims denied, but refused. I think their silence screams very loudly. This is a cash cow for them. There is no regulation, no way to prove anything. As it stands, it is very easy for the mortgage specialist to advise a client to answer No to a question, even if they have disclosed truthfully. With no underwriting, the bank has all the power. How to make this report fair? Have the banks answer some simple questions and provide some stats. Simple. Yes, everyone should take responsibility, but isn’t that what they are trying to do when they buy this coverage? They are trying to take care of their family, and have gone to the one place that you should be able to trust. Most of the banks have some sort of “Client is important” advertising jingle, but their actions show otherwise. Posted by: Jason | Feb 22, 08 12:13 PM
I am a financial advisor in Halifax Nova Scotia. I have been counseling my clients on this for years. Thank you so much for this documentary as it backs up what I have been preaching. I read an interesting comment one person stated. “what prevents an insurance broker from misleading people further to protect the insurance company” Well an insurance broker does not work for the insurance company. He works for you. The other key thing people should know about brokers is that we are licensed and are required to have “errors and omissions” insurance. This is similar to malpractice insurance for doctors. If an insurance broker misleads a client or improperly fills out the insurance application, the consumer is protected. They can actually sue the broker. Some things you should be aware of: Ask your broker to show you their license Ask your broker if there were any claims filed against them. Insurance agents have been upset about credit insurance for years as things like this give us a bad name. Thank you for bringing this to the forefront and letting the general public know Posted by: Vincent Dempsey | Feb 22, 08 04:01 PM
Case in point: Why would you buy something that you have no control over? 1. Mortgage insurance “group policies”. The policy holder is the bank. Not you. You are the insured person only. 2. The beneficiary of mortgage insurance is always the mortgage lender. You cannot designate the beneficiary. 3. This is redundant now: Most mortgage insurance products are “underwritten at claim”. 4. The bank loan officer who sells you mortgage insurance does not have a life insurance license. So legally speaking, he/she cannot sell insurance products to you. Because of the above, talk to an independent life insurance broker (who has a life insurance license) and get individual life insurance which: 1. You are the policyholder who has control over the policy; 2. You can designate beneficiary(ies); and 3. Your policy is underwritten at application. If you are declined (for whatever reasons), you will know right away so that you can seek coverage elsewhere. I would step away to say that bank mortgage insurance is a scam. However, based on the points mentioned above, it is NOT a product that looks for the insured’s best interest. Rather, it is a product that looks for the bank’s best interest. Posted by: Will | Feb 23, 08 11:41 AM
My first comment when I watched this episode was “Don’t we have a Federal Consumer Affairs Department and aren’t they supposed to PROTECT consumers?” But, then I remembered – we are talking about the Banking Industry and we all know who donate$$$ to the Political Parties in Canada. So we know that we the consumers can forget about getting any help from Ottawa! Posted by: Fred Petrie | Feb 23, 08 03:41 PM
After watching Marketplace, I went through my mortgage papers, looking for my insurance application to find out what we checked off. I could only find an application for my previous mortgage in 1999. In 1999 I checked “yes” because I had been on high blood pressure medication and was still taking it in 2004. I was declined for disability in 1999. I contacted RBC requesting a copy of my of my application for 2004. The lady I spoke with said she could fax me a copy. Later in the day, I received a call from her stating that we applied electronically and she could not obtain a copy of a signed application for both my husband or I. She asked me if I knew a Mr —-from RBC. She said he asked both of us the health questions and we answered No to all the questions. I told her he did not ask us ANY health questions because I certainly would not have answered NO because of the RX I was taking. I guess it is a case of his word against ours. I then checked my mortgage and sure enough I was paying for disability. She told us me had no worries because the policy is over 2 years old and we are 100% covered. I told her I wanted a copy of the insurance policy that could back up that information, the one we should have received at the time we started paying the premiums. She then told me, that if I was still not comfortable, I could answer the questions again, and if they feel I should not have been given the coverage, they would reinburse my premiums for the disability insurance. I had assumed because we did not reapply for the mortgage insurance in 2004 that it was just continuing, because we had already been paying premiums for 5 years on the existing mortgage. I am still waiting for the paperwork to come from RBC. I am not sure if we should have been paying any premiums if they do not have a signed application form. You pay insurance for a “peace of mind” but for that last few weeks we have been in turmoil. Posted by: Donna Stevens | Feb 24, 08 01:24 PM
This is in response to the February 6, 2008 10:19 PM posting by “Truth”. I am an official of the Real Estate Council of Alberta, the body responsible for the regulation of mortgage brokers in the Province of Alberta. There are no requirements for mortgage brokers in the Province of Alberta to offer mortgage life/disability insurance to their clients. The legislation governing the conduct of mortgage brokers may be viewed at www.reca.ca. Posted by: Joseph Fernandez | Feb 25, 08 05:19 PM
Shortly after watching your very informative program, my husband and I were very clear on answering the Questions for our new mortgage insurance application. We wanted to ensure that any underwriting was done at the beginning not at the time of a claim. The end result: DENIED. Let’s face it, they do not, and will not insure anyone that is a potential risk to a payout down the road, and with post-underwriting they will always have those loop holes. Incidentally, my husband has Type 2 diabetes, which we believe was the reason for denial. However, the insurance company did not provide us with the reason for denial. Perhaps it was because we were honest? Posted by: Kelly in Toronto | Mar 5, 08 04:08 PM
As mentioned, in a previous posting. I had written to David Agnew the Ombudsman [for Banking Services and Investments] regarding this mortgage insurance issue. His suggestion is that those who have a complaint should inform his office of the experience, either by calling 1-888-451-4519 or www.obsi.ca Posted by: David N. Burlington Ont | Mar 6, 08 10:21 AM
I love CBC for bringing this story to all of us. Firstly, thank you so much. I used to work for RBC and it is the same thing there as TD. The only thing is their form is a bit different. This is not shocking to me, but my heart goes out to anyone that has to go through this. Banks, do mislead buyers when selling insurance. We are told we cannot talk about any details even if you know them, and to tell the customer to call the number on the form. But we have to make them sign a denial form if they don’t want insurance. Also the bank books a 1-hour appointment and in the last 10-5 mins sells this insurance, so the customer does not take their time reading the fine print. I think banks should be stopped from doing this to innocent people. Posted by: Daljit | Mar 12, 08 10:36 PM
If I was CEO of TD Bank I would file a lawsuit against CBC!! I agree the Post-claim practice is disgusting, but all 5 big banks and other lenders use the EXACT same standard and have been doing so for years. The “corporation” for whatever reason only presented stories featuring this one bank. In doing so they have misled much in the same way as the banks do. (You can see from the number of people “closing there TD accounts” in many of the postings on this page). Kudos on a great topic but shame on you for poor presentation. Posted by: Ken | Mar 28, 08 11:09 AM
As a licensed agent for life insurance, I see this happen on to people too often. People do more due diligence on their vacations and trips than on their insurance and investments. We buy insurance for security and safety. When it rains in our life, it should provide that umbrella, not leave you feeling soaked. Posted by: Harvey Garraway | Apr 2, 08 02:28 PM
I was a personal banking representative with one of the 5 major banks and yes, we sold the same type of insurance that was presented on the program. I had absolutely no training in regards to life or disability insurance before providing these products to my clients. While I held this position (3 years), I saw two cases of it not paying out. Also, the disability insurance, if you do qualify, would only pay for two years…that’s it. I am very proud to say that I left the bank eight years ago and joined Investors Group. I studied extensively to obtain my life license and must renew my license each and every year. In order to renew my license I have to prove that I have been diligently attending educational seminars, and studies for a certain number of hours each year. I have insurance specialists that provide training and guidance so that I can provide my clients with the best possible solution at the best possible price. On another note, I see more and more clients with incredible amounts to debt. The banks are so eager to provide credit cards and loans to people when they don’t have any backup whatsoever. They do not look at the total picture for clients and think of the “what if’s”. My advice…deal with a company that provides “Financial Planning”. You will have all of your financial goals taken care of, and reminded of the ones that you may possibly have overlooked. We provide our clients with mortgages, loans, investments, insurance, tax and estate planning. The next time you get a call from a Financial Advisor, give them the opportunity to show you what they can do to help you. You won’t be sorry. P.S. Since I have been with IG, I have two clients that had spouses that passed away. Their bank insurance did not cover. Posted by: Cheryl | Apr 3, 08 09:56 PM
I lost my husband in Aug. 2006 and both our house and business line of credit were insured through TD Canada Trust, Within 60 days both claims were denied claiming my husband lied on the application. At the time of the applications I was sitting right beside him and it seemed that there wasn’t any time to read or re-read the application as the bank clerk seemed to want to process the application quickly and get to their next appointment. This has to stop and the consumer has to be more protected in their rights not that the banks get richer and us (widows) are left in turmoil with unforseen debt. We have lost enough and somehow have to cope and grieve for another loss our home. I would be willing to sign a petition of some sort to forbid banks in selling insurance products. Posted by: Norma Furgiuele | Apr 11, 08 08:31 PM
It is enlightening to see customers pointing out how alone they are when investing with Canadian banks. There is no government bodies ready to assist customers as they are on the side of the financial institutions. We need legislation; however, that will never happen in our life time. The banks rule the country and bullies customers. Posted by: Apple Samson | Apr 12, 08 03:22 PM
When we bought our first house, we were advised to refuse mortgage insurance because of the low chances of collecting if we ended up needing it. We were advised (by our broker) to get Life insurance and Critical Illness insurance instead. When my wife was diagnosed with cancer, it still took two years and $16K in legal fees to get the company to pay out. I’m told that insurance companies always deny claims at first and only look into the claim if you pursue it. Should I ever need to claim, the insurance company will hear from my broker first and my lawyer second. I will not be at all nice to them. Posted by: Steve | Apr 12, 08 08:05 PM
Brutal! Just one more example why banks and insurance companies need to be watched more closely by government. Or is that just putting the fox in charge of the chicken coop? Posted by: Tony Brewer | Apr 13, 08 11:28 AM
I’m a great fan of cbc radio and tv. My Sunday A.M. is Corrie and news, marketplace etc.etc.etc. I was watching the story of the T.D. insurance and realized that I have the same insurance because my mortgage is with T.D.. I guess I’d better take your advice and get a certified mortgage broker. Thanks C.B.C. Posted by: Mary Carroll | Apr 13, 08 12:35 PM
i too had a similar experience ,after just 9 mths into my mortgage i needed surgery for a (groin)hernia .when i applied for the disability insurance i was told i needed to go to my doctor and get records dating back 2 yrs .i did this and was told i got turned down due too a back problem that they said showed up in my records a yr previous .i did not have a back problem .i just went to my doctor with a spasm in the muscle of the lower back which after resting for a wk it was fine .this had absolutely nothing to do with the hernia surgery i needed .i appealed this decision and again was turned down .they did refund my premiums and i had a letter sent to me from the bank i deal with (not td bank).this letter stated they were not admitting any fault and that this was a independent company not them i was dealing with .they then told me they were in no way admitting fault but was offering me a cheque for $1000.00 if i would sign a waiver to not seek disability from them in the future .they stated i should consult a lawyer if i chose to .i knew the disability insurance was out the window at that point anyway so i did accept the $1000.00 (you bet i did !)they told me i was still actively involved in a life insurance on my mortgage and that was ok .i was very wary since then and know deep down i guess this also is a big scam as well .to all of you people out there in this business who know what your doing and this is wrong . you have no conscience you are despicable how degrading can you be, talk about selling your soul.may you have has many sleepless nights as the poor innocent victims lives you destroyed. Posted by: anthony | Apr 13, 08 01:18 PM
DON’T buy mortgage insurance* *Here’s why: Prudential denied my Royal Bank Mortgage claim. I consulted a lawyer. My loan manager at Royal also told me truth, later. The lawyer found: that no illness, no disability and no death – with a few exceptions, would be covered. Part of the wording said it would be covered. But, it is denied in another part. I had previously been a general insurance underwriter and claims adjuster for 10 years, passing all courses and licenses with high scores. But even I was caught unaware too late. My money was gone, I am totally disabled and unable to work, my mortgage claim denied. (It’s taken me over an hour to type this) I was appalled to find out mortgage insurance was a pure con, and should not be purchased by anyone. Ps. Having been in the industry, several closest friends own life insurance agencies.. even they don’t defend these policies, and have questioned themselves personally Posted by: Barbara | Apr 13, 08 03:23 PM
OK, I’m going to play some devil’s advocate here. I’ll start by stating that this is clearly abusive on the part of the insurance companies issuing the policies. Two problems here, start from the small problem and work your way up. #1. Small: You have been on heart medications and you apply for an insurance policy against your health that doesn’t include any form of medical follow-up. Caveat Emptor? Doesn’t this raise giant red flags? Isn’t this like all of the people in the US who are going to lose their home b/c they applied for mortgage loans without undergoing a credit check? #2. BIG: Why the heck are you figuring out mortgage insurance at the time of signing your mortgage? Don’t you have this already figured out? You’re buying a house, something worth 2 to 4 times your annual salary. The concept that “death & disability” insurance on your home is somehow different from your regular “death & disability” insurance is kind of mind-boggling. It’s just more red flags: “Why am I getting insured twice? What if they overlap? Shouldn’t I speak to my broker and see what type of deal they can get me?” I’m not apathetic to these situations. I’ve lost two people to cancer in the last 3 year (incl my father). Having to deal with insurance and banks during the grieving period is a horrible task. Dicey insurance aggravates the problems. But it all started with poor planning and some random decision to buy additional insurance without talking to your existing insurance company. So if you have dependents, take care of them now by figuring out all of your insurance needs before making big purchases or life changes. And then continue to take care of it by regularly updating your will and your insurance policy as life’s big events happen. If you don’t understand all of your needs or don’t have time to deal with it, then invite someone you trust or pay a licensed individual to help you with complex financial decisions. Posted by: Gates VP | Apr 14, 08 12:07 AM
Please read: There’s many reasons not to buy mortgage insurance. It has an ingenious back-door denial: They deny your claim saying you must prove you are forever disabled, saying the condition could get better. A bank manager said she had clients (example: 100% disabling MS) and many more whose claims were denied. They have to prove that they can never get better. Turns out, no one qualifies, not even my doctor who was dying of cancer and couldn’t work for several years before she died. It’s in the tricky and deceitful wording. Posted by: Barb | Apr 14, 08 11:41 AM
My family as well have been scammed into signing up for this insurance, fortunately they got out of it before they were denied….How is our government allowing these things to happen to the citizens of this country…I strongly urge everyone to pull out of TD Bank and cancel any fraudulent insurance you may have signed up for…hit them where it hurts IN THEIR BANK VAULT!!!!! My family is in the process of closing their account with TD Bank….Our sympathy and full support goes out to those featured in this program…I am also faxing every MLA in my province as well as Senate members, and any other government agency I feel should be responsible for regulating these institutions and protecting Canadian consumers….Thank you MarketPlace…you program is exceptional and thanks to you at least some of us will have a fighting chance!!!! Posted by: Kara MacRae | Apr 14, 08 07:53 PM
We couldn’t believe it when we saw this story about the critical illness insurance. It could have been our story you were telling.We had critical illness coverage( we thought), so when my husband was diagnosed with kidney cancer there was a certain peace of mind knowing we wouldn’t have to worry about bills after his surgery. When my husband went to renew his asthma prescription last year, they claimed he lied. You lie, you don’t get the coverage. We are furious, but your story gave us more motivation to fight for what we know in our hearts is right. Thank you for this story. Posted by: Barry | Apr 17, 08 09:43 AM
I lost my husband recently very suddenly. We too, thought we were protected by the mortgage insurance through TD Canada Trust. Unfortunately this was not the case. Underwriting a policy after a claim is a useful way to avoid paying. The small print in the policy wordings cover anything and everything that could kill a person and if it isn’t pointed out at time of signing, by a qualified individual who knows what they are talking about you are led to believe you are covered and so you pay – imagine if this was the case with car or home insurance – we wouldn’t buy it, would we? Posted by: Grieving made harder. | Apr 17, 08 11:03 AM
If the bank finds a mistake on my application for mortgage insurance and refunds my premiums (rather than pay the claim) does this mean that if I discover a mistake I can ask for my 30 years of premiums to be refunded ? If the bank can do it, why can’t I ? Posted by: Bill Mombourquette | Apr 19, 08 01:40 PM
I do not presently have a mortgage but DID have and DID carry the so called’insurance’ for many, many years. Now I am wondering if that is misrepresentation by omission. You know, just omit the part where they take your money for NOTHING. My nephew was recently diagnosed with terminal cancer and like many others felt secure in his mortgage insurance. Guess what??? yep, nothing!!!!! except major profits for the bank. If there is a class action suit, I am joining in. Their profits are over the top already and when they lost a few million a year, they just arbitratily raise fees for other so called services to cover it. Can you and I ever do that. Go get them – call you MP today and don’t take any of this garbage sitting down. Thanks CBC and Wendy. Posted by: Del Grimm | Apr 21, 08 11:18 AM
I work as a Financial Planner for one of the biggest firms in Canada. Part of my job is to educate people on number of financial matters, in particulars investment and insurance. It seems to me most people don’t want to devote some of their time to learn about what matters. I don’t agree with the way the banks promote Life Insurance or selling it period.Non of those mortgage specialists are qualified or licensed to sell life insurance; however, the onus still on the home buyer to do a bit of home work and decide for himself/herself which product is the right one for him/her. I have helped a lot of people making an educated decision in terms of selecting the right type of insurance and the right amount of insurance. However, we can only help those who want be helped. Posted by: Drake Mansur Hadisi | Apr 28, 08 09:53 PM
I guess the real question becomes where did the premiums go? Do they at least get that back? Insurance companies quick to take money slow to pay it out. Fairly standard. Posted by: bill durf | May 1, 08 04:58 PM
It is terrible when claims get denied period. I don’t believe any insurance company is innocent. They have to make money to exist! Having said this, I have also seen many claims get paid and many get paid when they should not. As echoed many times buyer beware. Also shame on Marketplace for only showing one side. Did anyone notice how they only showed part of a sentence from a whole written statement from TD. Why would any other company respond when it could so easily be taken out of context! Marketplace has drawn attention to a serious issue, but also done it in an irresponsible fashion and nicely created controversy! Posted by: Chris | May 1, 08 10:24 PM
I understood when taking my brokering license in Canada that ALL Life Insurance in Canada contained the 2 year Non-contestability clause even if not written into the policy, which means the Life Insurance Company is on the hook to pay out every claim even for a fradulent application or a sucide 2 years after the policy is written. A policy is in effect at the time of acceptance of the first premium. IF THIS HAS CHANGED PLEASE INFORM ME !!! Louie Posted by: Louie | May 18, 08 02:46 AM
For all you people that were quick to jump up and bash your banks and cancel your policies, did you get something to replace the policies with? Go out and try and purchase life insurance and disability insurance through all of the insurance agents who have written on these board. I dare you. Buy one for your spouse as well. The fact is you won’t because the cost that these “ethical” insurance agents want you to pay is outrageous. Do yourself a favour when you are asked three questions simply write yes up front and let your bank/insurance company underwrite you up front. It makes me sick to read about these agents from Sunlife, Priamerica ,etc, etc telling you how noble and honest they are. Take accountability for your own actions. CBC you should be ashamed!!! Posted by: wake up!! | Jul 14, 08 06:01 PM
I just watched your segment on insurance coverage because a person at work told me too after I told them that I was denied mortgage insurance because the insurance company said I lied on my disability insurance form. In a very long question asking eveything from whether I had heart disease to whether I was depressed, the question also included ‘did I ever have back or neck problems or was diagnosed with anxiety’ within the last 3 years. I did mark the box No. I am off work with a perforated disc in my lower back and will probably need surgery. My mortgage insurance company said that I lied on my application because two years ago I had ‘complained’ of lower back pain to my doctor and two years ago I had received anxiety pills during a difficult time at work. They said that my claim was null and void and all previous payments for insurance would be reimbursed to me. They also added that this decision had nothing to do with my present claim. For anyone thinking about buying mortgage insurance through your bank– I say don’t! I had told the person working on my mortgage that I had taken anxiety pills two years ago and she said, “Oh, that is minor, if that is the only thing don’t worry about it just check the no box” Thanks Marketplace for your segment on this and for everyone else, it is not just the TD Bank and Canada Life, it is also BMO and Sunlife as well. Posted by: Karen | Jul 18, 08 02:43 AM
I just caught this episode and was not surprised at all. When my father died recently, the insurance claim was denied as well through CIBC Bank. This practice should be outlawed, however since the Banks can do whatever they want, charge whatever they want and have politicians on their side, it is unlikely we will ever see change. Posted by: Craig Lavigne – Saint John, NB | Jul 26, 08 04:02 PM
It was disgusting to hear what TD bank and Canada Life, all banks for that matter, do to dupe the consumer. Do the politicians not believe these horror stories ? Judging from the number of responses this is an important injustice. I suggest victims initiate a class action to smarten up the banks…but then, that would be fodder for the lawyers. Wouldn’t it? We can’t win. Posted by: sylvio gagnon | Jul 26, 08 08:32 PM
I was diagnosed in 2002 with schizophrenia. I applied for mortgage insurance this year in March but was denied due to my diagnosis. Their explanation was that there was a high suicide rate with this illness..I acknowledged that if i were to commit suicide, the insurance wouldn’t pay out anyway (no insurance company would). I asked what’s the difference if i were to die in a car accident?! They refused me outright! I am disgusted with RBC insurance because of what i experienced! And i’ve been dealing with them for 9 years. Posted by: C Fraser | Jul 27, 08 12:17 PM
Is there a lawyer out there who would take on a class action suit for all of us who want to go forward? Those who have lost their spouses, such as myself, have been doing nothing about this because we are afraid to take on a corporation as large as TD Canada Trust, with their in-house legal teams, for fear of losing what financial stability (if any) we have left. In my case, they paid off my husband’s Line of Credit with no problem, then denied the mortgage insurance. Talking out of both sides of their mouths. Myself and my children believe we have a case as they had set a precedent by paying the Line of Credit, but we just don’t have the money to hire a lawyer to fight it – stuck between a rock and a hard place. By the way, for those who wonder, I did not receive any rebate of the premiums paid over the years for the ‘non-existent’ insurance policy. Please, let’s all stand up to these white collar fraud artists. Posted by: Amy Green | Aug 7, 08 09:01 AM
ivan, i realize i am posting this kind of late and that you may not read this. i work at one of the 5 big banks in canada. if you question a bank representative on the insurance question, we are instructed to say that we cannot help the customer with the question and if they feel iffy about it, they are to speak to the insurance part of the bank. usually, i would recommend that they answer ‘yes’ in order that one does not answer incorrectly on the insurance document. if they answer yes, they are automatically directed to answer a health questionare which answers much more detailed questions, and needs to be approved by a licenced insurance representative. this article disturbs me as a bank employee who is to sell this type of insurance, as we are not made aware of the post-claim underwriting process. it’s unsettling to know that i may be selling a faulty product to an unsuspecting customer, especially since over time, you build a professional relationship with them, and will most likely get to know them well (and probably their families). this is something that i am going to be looking into further within my employer. Posted by: jane | Aug 7, 08 09:00 PM
Hey TD Bank – I canceled my Insurance today… And guess what, my mortgage is up for renewal soon – and you want my business? It’s time for the TD Bank to release it’s denied claims rates – as far as us consumers know – no money is leaving the bank. Posted by: Ron | Aug 26, 08 07:04 PM
My mortgage is with BMO and their insurer is Sun Life. When my husband was permanently disabled, they paid the mortgage, for two years and then stopped. My husband’s disability didn’t stop. Mortgage Disability Insurance? Definately not what it conveys. What you get is short term coverage based on the fact you have a mortgage. There is no relationship between mortgage insurance and the mortgage it’s supposed to be covering. There should be a law to forbid this type of product. A normal person would assume that Permanently Disabled translates to Permanent Benefits! I find the whole system totally dispicable. Sun Life and BMO are big companies and they should be ashamed… Thankyou Marketplace for exposing this wrong. Posted by: Janet | Sep 25, 08 06:45 PM
On October 04.07 my wife and I purchased a home. We were asked at the bank if we wanted Critical illness and life insurance. At the time we thought it was a good idea (just in case).We signed and initial the application that we wanted both insurance. The bank representative failed to check off any of the boxes of what type of insurance we were applying for. On January 29.08 I was told that I had cancer. My wife and I both went to the bank to fill out the forms. I was told by two TD representative that we did not have any insurance. I showed them the signed and initial application from both my wife and myself and also the initial of the bank representative who filled out the application. In short, I was in contact with the insurance company to inform them of the situation. I was told by them to write out a letter explaining what had happened. The insurance company told me that they did not see anything wrong in what the bank representative did. Further more, the insurance company told me that even if the paper work was done right I still would not be insured because the diagnosis occured within the 90 days of my coverage taking effect. I had my colonoscopy done Jan.23.08 received my results on Jan.29.08. We got the insurance on Oct.04.07 well past the 90 day. I have been in contact with TD Life trying to get answers. 9 months after signing the application I received a letter from TD Life telling me that I now have life insurance coverage. I just don’t understand, first I was told I have no insurance what’s so ever, now they give me life. I have been fighting with them ever since. Now they have gone as far as to write to all my doctors for copies of my clinical notes,consultation reports, diagnostic studies and test results during the period Oct.04.07 to Jan.04.08. Why are they now going throught all this trouble. Posted by: Philip E. Marinucci | Oct 1, 08 03:38 PM