Suppose a banker sells you Mortgage life insurance on the mortgage he/she has just arranged on your behalf and he/she takes a fee from the insurance co. Then the insurance company fails to pay the death benefit on a technicality. Who is the banker representing. Their Mortgage client or their Insurance co sponsor?

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

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

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

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

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

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

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

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

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

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