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Critical Illness Insurance from a Bank: Heartbreaking Story

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There are some insurance products where the devil is in details. One such product is critical illness insurance. We are focusing on this today given its recent media publicity.

The sad critical illness story of Bianca Williams

(Story abridged from a Global News article)

Bianca Williams needs chemotherapy, radiation and a bone marrow transplant, but TD Bank insurance has denied her critical insurance claim.

“We thought at least with this coverage, we’d be able to provide for our family,” said Williams, a 29-year-old public health nurse in Durham. “[But] I’ll eventually get an infection I can’t fight.”

In September she was diagnosed with two conditions: aplastic anemia, a form of bone marrow failure, as well as paroxysmal nocturnal hemoglobinuria — or PNH — which affects young adults.

Williams said her doctors regard the conditions as extremely serious, and they wrote letters supporting this opinion. When Williams applied to make use of her benefits, however, TD refused to make any payments whatsoever.

In a denial letter reviewed by Global News, a TD Life Insurance Company claims specialist wrote to advise Williams that her claim didn’t meet the criteria of a “critical illness” under its policy.

“Cancer (life-threatening) means a life threatening tumour characterized by the uncontrollable growth and spread of malignant cells,” the letter read. Neither of Williams’s conditions are cancer.

When the policy was sold, the TD Bank sales representative assured Williams and her husband that they’d be covered if they had a serious condition that prevented them from earning an income, but the representaive didn’t provide a list of conditions that were covered or exempt.

“At the time I had [critical illness] insurance through another provider. They said this was the same or better,” said William’s husband.

When Bianca is well enough to receive a bone marrow transplant, doctors have told her she likely won’t be able go back to work for a year or longer. She doesn’t qualify for short-term or long-term disability benefits through her employer. The insurance, which costs the couple about $2,000/year, was intended to provide for an unforeseen situation like this.

“The customer asked us to review their claims decision, and our review is ongoing…” informed Crystal Jongeward, manager of corporate and public affairs for TD Bank Group.

Critical illness insurance provided by a bank – what went wrong?

This tragic story highlights the importance of both the insurance agent and the client understanding what a critical illness policy covers, and what it does not.

The critical illness insurance provider seems to have failed in several aspects:

1. The insurance agent failed to disclose the exact list of covered critical illnesses

The information on the website and insurance certificate reveal that only a limited subset of critical illnesses are covered, but not the pre-condition that Bianca Williams has faced.

The Critical Illness Recovery Plan from
TD Insurance

Critical Illness via Mortgage Insurance from
TD Insurance

Cancer, heart attack and stroke are the three most common critical illnesses. If you’re diagnosed with one of these conditions you may not be able to work. The Critical Illness Recovery Plan2 can help support you during these times.

 

Receive tax-free cash benefits up to $50,000 when diagnosed with cancer (life threatening), heart attack or stroke.

Mortgage critical illness insurance can pay off your mortgage, if you are diagnosed with:

 

  • Cancer (life threatening);
  • Acute Heart Attack; or
  • Stroke.

 

Thus, both critical illness insurance products shown above (from TD Insurance) cover only the three most frequent critical illnesses, but leave the customer unprotected in the case of a rarer health condition. It is the job of an insurance agent to disclose the covered conditions to customers in a clear and understandable way.

2. The insurance agent was not clear on coverage amount

It is not enough just to cover a particular critical illness. One should also be very clear about the amount of existing coverage.  If we look at the TD Insurance from before we see the following:

The Critical Illness Recovery Plan from TD Insurance

Critical Illness via Mortgage Insurance from TD Insurance

Receive tax-free cash benefits up to $50,000 when diagnosed with cancer (life threatening), heart attack or stroke

Mortgage critical illness insurance can pay off your mortgage.

 

Both products have existing hooks – the first plan does not offer any coverage beyond $50,000 which, in many cases might not be enough. Imagine the need to go through complex medical treatment but also still support your family, especially if you are the principal breadwinner.

The second plan, mortgage critical illness insurance, only covers the outstanding mortgage amount, not any other expenses you might have. The only guarantee you are getting when buying mortgage insurance is that your home will not be collected by a bank, should you be diagnosed with a critical illness named in their policy. There are better ways to protect yourself. We will get back to that very shortly – sit tight.

3. “Over-marketing” of less-than-perfect products.

Often banks oversell their offering be it with credit cards where travel insurance protection comes with a bunch of limitations and restrictions or with credit insurance such as the case of mortgage clinical illness insurance.

It is sad to see that often a combination of an attractive price and simplified/reduced coverage results in higher sales for the banks – at the cost of agents being under-equipped with knowledge and the understanding necessary to explain all the risks to their clients.

Critical illness insurance – what can you do?

The situation above appears to be a classic case of the advisor not understanding the critical illness plan they offered, and more importantly, not being explicit with the client about what is covered and what is not.

Clearly, if this had been explained to the client, they would have realized they do not have a claim based on the contract, and if this were to go to court, it would be hard to win this case. Their only hope is that TD Insurance will decide to pay on the basis of misrepresentation by the financial planner at the bank.

It also highlights the importance of speaking with a licensed insurance advisor/broker who will take the time to explain the contract, and what is covered and what is not.

Here are examples of many other plans that insurance brokers have access to which cover more complex conditions.

The insurance coverages from these providers show that they cover cases of aplastic anemia, one of the health pre-conditions discussed above. Such detailed coverage, though, may come with a cost.

How much would a more inclusive policy cost?

What more inclusive critical illness insurance plans cost

That old adage, “you get what you pay for” applies here. Below is a comparison of several plans based on what a female aged 29 would pay for $300,000 of very comprehensive critical illness insurance coverage.

TD Insurance Critical Illness Insurance (not covering the condition above)

Manulife Term 20 LifeCheque Critical Illness (to cover the condition mentioned above)

Manulife Term 20 LifeCheque Critical Illness (to cover the condition mentioned above until the age of 75)

$33/month

$94/month

$171/month

 

If you have any questions regarding critical illness insurance, our specialists, who have experience with numerous plans and insurers, are happy to provide you with a tailored critical illness insurance quote and answer all your questions.

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Multiple trucking violations by Humboldt semi driver noted in government report Canadian Underwriter

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MELFORT, Sask. – A Saskatchewan government report says the driver of a semi-truck should not have been on the road the day he flew through a stop sign and caused a crash with the Humboldt Broncos team bus.

The report filed during the sentencing hearing for Jaskirat Singh Sidhu notes 51 violations of federal trucking regulations on drivers’ hours and 19 violations of Saskatchewan trip inspection rules.

It includes the 11 days prior to the April 6, 2018, crash at a rural intersection that killed 16 people and injured 13 others.

The wreckage of a fatal collision, involving a bus carrying the Humboldt Broncos junior hockey team, outside of Tisdale, Sask., is seen Saturday, April, 7, 2018. THE CANADIAN PRESS/Jonathan Hayward

“If Jaskirat Singh Sidhu had been stopped and inspected on April 6, 2018, prior to the incident he would have been placed under a 72-hour out-of-service declaration … preventing him from operating a commercial vehicle,” says the report.

The document is signed by two senior Saskatchewan government officials and is included in the RCMP’s forensic collision reconstruction report.

It expresses concerns about the distances Singh was driving as well as the amount of time he took off to rest.

The report notes that if Singh had accurately documented his time at work on April 1 it ‘would have resulted in the driver being in violation of the maximum on-duty time of 14 hours for the day.”

The report says questions remain about what happened the day of the crash.

“We have strong concerns regarding the timelines of Jaskirat Singh Sidhu’s day on April 6, 2018, as there are unanswered questions as a result of the incomplete log on that day,” it says.

“The identified mileage and distances required to travel to the locations identified in the log and known locations also cause concerns.”

Sidhu had been driving for about a month before the crash occurred.

The owner of the Calgary-based trucking company, Sukhmander Singh of Adesh Deol Trucking, faces eight charges relating to non-compliance with federal and provincial safety regulations in the months before the crash.

They include seven charges under the federal Motor Vehicle Transport Act: two counts of failing to maintain logs for drivers’ hours, three counts of failing to monitor the compliance of a driver under safety regulations, and two counts of having more than one daily log for any day.

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Signs of progress on national flood program for Canada Canadian Underwriter

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Canada is making good progress on a national flood program, pending a final decision by federal, provincial and territorial (FPT) ministers responsible for emergency management.

“What they are looking at is one national insurance solution to improve outcomes for high-risk Canadians across the country,” Craig Stewart, vice president of federal affairs at Insurance Bureau of Canada (IBC) told Canadian Underwriter in an interview Tuesday. “There may be regional insurance pools adapted to local conditions, but it would be nationally coordinated.”

FPT ministers responsible for emergency management have mandated IBC to lead a national working group to take a look at options and what they would look like. IBC provided three options:

  • A pure market approach (like in Germany and Australia) where governments exit disaster assistance
  • A broadened version of the status quo, but with better-coordinated insurance and disaster assistance
  • Deployment of a high-risk pool analogous to Flood Re in the United Kingdom.

The next step is for the working group, which Stewart chairs, to cost out the pool. “The pool needs to be capitalized as it was in Flood Re,” Stewart said. “So, we need to figure out where that money is going to come from. Is it going to come from governments? Is it going to come from insurers? Where is it going to come from?”

A final decision will be made by ministers after the high-risk pool is costed, which Stewart expects to be completed by June. Decisions on eligibility, how to capitalize the pool, and on any cross-subsidization await the results of that costing analysis.

In addition, this spring, the ministers will hold a technical summit on flood data and science. “Our view of the risk many not align with the government’s view of the risk,” Stewart said. “We need to bridge the gap. This symposium is going to focus on essentially the data and science of flood modelling.”

In early 2020, there will be the launch of a consumer-facing flood risk portal. IBC has been working with the federal government to develop the authoritative flood portal, where consumers can discover their risks and what to do about them.

“Elevating consumer awareness of flood risk is key,” Stewart said. “Consumers aren’t going to be incented to protect themselves or to buy insurance unless they know their risk.”

In May 2018, FPT ministers responsible for emergency management tasked IBC to lead the development of options to improve financial outcomes of those Canadians at highest risk of flooding. IBC worked with a wide range of insurers, government experts, academics and non-governmental organizations to produce the three options, which were tabled with ministers last week.

The ministers released the first-ever Emergency Management Strategy for Canada: Toward a Resilient 2030 on Jan. 25. The document provides a road map to strengthen Canada’s ability to better prevent, prepare for, respond to, and recover from disasters.

“In less than two years, Canadian insurers have secured a mandate with every province and territory to finalize development of a national flood insurance solution, have successfully catalyzed a national approach to flood risk information, have secured over two billion dollars in funding for flood mitigation, and have succeeded in securing a funded commitment for a national flood risk portal,” Stewart said.

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Insurers disagree over meaning of ‘household’ in policy language Canadian Underwriter

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A dispute over what exactly constitutes a “household” in a home insurance policy has reached the Court of Appeal for Ontario.

Several members of the Weiner family were sued after a person drowned in 2010 in a vacation home on Lake Eugenia, about 70 kilometres west of Barrie.

The homeowner was Enid Weiner, who had moved to a nursing home in 2008 or 2009 and has since passed away.

The home was insured by Intact. Enid Weiner was the only named insured, but the policy provided liability coverage for relatives of the named insured while those relatives were “living in the same household” as the named insured.

Whether this means Intact is also providing liability coverage for Enid Weiner’s adult son, Scott Weiner, was a source of disagreement among judges and insurers alike.

Scott Weiner, along with his wife and daughter, were named defendants in the drowning-related lawsuit. Also named was the estate of Enid Weiner. Scott Weiner used his mother’s house as a cottage but did not live there permanently.

Scott Weiner’s own insurer, TD Insurance, settled the lawsuit. TD Insurance took Intact to court arguing Intact has a duty to defend the lawsuit.

As it stands, TD has lost its case.

“The mere fact of co-residence is not enough to constitute membership in a household,” wrote Ontario Court of Appeal Justice Bradley Miller in Ferro v. Weiner, released Jan. 28, 2019.

Initially, Ontario Superior Court of Justice Pamela Hebner ruled in favour of TD. In her ruling, released Apr. 12, 2018, she ordered Intact to pay $62,500, or half the cost of settling the lawsuit.

Justice Hebner found that Scott Weiner was in the same household as his mother. He came to the cottage when he wished and took care of it as if it were his own place.

But Justice Miller of the appellate court countered that, at the time of the accident, Enid was living in a nursing home.

“Scott lived with his family in the city and had organized his life around his urban household. Prior to entering the nursing home, Enid lived with Scott’s brother, and not with Scott and his family,” added Miller, citing several court rulings, including Wawanesa Mutual Insurance Co. v. Bell, released in 1957 by the Supreme Court of Canada.

Wawanesa v. Bell arose after Murley Miller was killed in 1955 while driving a Vauxhall car owned by his brother, John Milley.  Other victims of that accident sued Miller’s estate. Murley lived at John’s home in Sarnia.

The court in the 1957 case defined the term “household” in the following way:

“The ‘household,’ in the broad sense of a family, is a collective group living in a home, acknowledging the authority of a head, the members of which, with few exceptions, are bound by marriage, blood, affinity or other bond, between whom there is an intimacy and by whom there is felt a concern with and an interest in the life of all that gives it a unity.”

Members of a household could include domestic servants and distant relatives living there permanently, the court found in 1957.

“Although a household is not synonymous with a family, the existence of a household is evidenced by the extent to which its members share the intimacy, stability, and common purpose characteristic of a functioning family unit,” Judge Miller of the Court of Appeal for Ontario wrote in 2019 in Ferro v. Weiner.

Members of a household “typically share a residence and resources, and integrate their actions and choices on an ongoing and open-ended basis,” added Miller.

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