Inaccurate insurance form answers costly

By Staff | December 6, 2013 | Last updated on December 6, 2013
1 min read

Filling out life insurance applications incorrectly can be very costly, as a recent case reported in the Toronto Star illustrates.

Read: Health concerns trump finances for boomers: RBC

On November 1, 2005 Karen Cheetham and John Foreman applied for life insurance through TD Canada Trust. “The form asked if he had seen a doctor or been treated within the previous 24 months for a specific list of conditions. He answered no.

“In fact, he had several health problems on the list that had been identified by his doctor within the previous two years, including elevated cholesterol and asthma,” says the report.

In 2007 Foreman died from brain cancer, “which was unrelated to any of the incorrectly answered health questions.” But TD Canada Trust wouldn’t pay the proceeds “because his death occurred within the 24 month ‘contestability period’ after he completed the application. Had Foreman died three weeks later, after the 24-month period, the proceeds would have been paid, according to the policy provisions,” the Star explains.

Read more here.

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The staff of have been covering news for financial advisors since 1998.