Toronto Star and TD life insurance

One couple’s $97,500 life insurance mistake

A decision by the Ontario Superior Court highlights the importance of correctly answering health-related questions on insurance applications.

By: Sheryl Smolkin At Work, Published on Thu Dec 05 2013

In a nutshell TD insurance did not pay a claim.



The application also asked whether in the same period Foreman had been denied life or critical illness insurance, or had to pay a higher premium because of his health. Again, he answered no. But a later investigation by TD Canada Trust revealed that Transamerica had issued a life insurance policy at higher than normal premiums because of his health problems.

Foreman died from brain cancer on October 12, 2007, which was unrelated to any of the incorrectly answered health questions. However, TD Canada Trust refused to pay the policy proceeds because his death occurred within the 24 month “contestability period” after he completed the application.

Rule #1 Never, ever buy creditor insurance from the bank!!!

Lets review again.
You leave the TD Bank…Insurance gone
Premiums are higher!!
Insurance is offered by inexperienced people at the bank.
Pay off the loan…coverage gone!
Insurance is (not) permanent!!

The Judge also accepted evidence from the bank’s underwriters that the application would have been rejected if the true state of Foreman’s health had been revealed. He characterized this as a case of misrepresentation, but not a fraudulent act.

In an August 2013 decision, Maranger refused Cheetham’s claim for the $97,500 and allowed the bank to claim its court costs from her.

So at $500/per hour you can only guess how much the client is on the hook for!”>