Tara A. Miller, Q.C. February 2021
As reviewed in previous blog posts in MDW Law’s “Life Insurance” series, simply having life insurance in place does NOT always ensure that it will be paid out after you die. This is the 4th in an ongoing series of 5 blog posts addressing issues that can arise with life insurance with the goal of empowering you and your family with information to ensure any life insurance you acquire will be paid after your death.
Today’s post provides top tips to consider when you are planning for the financial security of your loved ones by purchasing life insurance. The best time to avoid a future possible denial of payment is the PRESENT and when you are in the process of completing an application for life insurance.
- Work with an experienced licensed life insurance advisor who can give you appropriate guidance and advice (see: https://www.mdwlaw.ca/life-insurance-from-a-licensed-life-insurance-advisor-or-a-bank/).
- Know that you will have to provide information about your work, financial and medical history to allow the life insurance company to properly assess the risk of providing life insurance and the premium it will charge. This information will be gathered in an application which is typically completed with a life insurance advisor and also from a possible medical exam. Your life insurance advisor should answer any questions you have about the need and extent of the information required.
- Be forthcoming in your application for life insurance and provide a complete and accurate history. Provide honest answers to literal interpretations of questions at all times. For example, if the application asks if you have used tobacco in the past year and you smoked one cigarette, then the answer is “yes”. This is the best way to be approved and also the best way to ensure the life insurance claim is not denied after your death based on a material misrepresentation (see: https://www.mdwlaw.ca/life-insurance-legal-101/).
- Understand that you may have to attend a medical exam and provide further information during the exam as part of the application process. If an exam is needed, the insurance company will arrange a time and place for you to meet a doctor or paramedic/nurse at no charge to you. Usually, the exam will involve only basic medical tests and medical history. Try to ensure the medical exam is scheduled as quickly as possible after the written application is completed with your life insurance agent. Again, your life insurance agent will be able to explain why all of this information is needed and answer any questions.
- Ask for a copy of the application to review in advance of meeting with your life insurance advisor so you can ask any questions about the information required in the application when you meet with them to complete the application.
- Ask for a copy of the application for you to review after it has been completed, especially if the life insurance advisor has completed it for you. This allows you to review the answers for accuracy and raise any issues immediately if the information recorded on the application is not complete or correct.
Next week’s post (and the final in this series) will look at what to do when there is a dispute over who should receive life insurance (adverse claimants) following the death of the person with life insurance.
These blog posts are not meant to be legal advice or an exhaustive review of the law in this area. If you or a family member require more information, please contact MDW Law to schedule a complimentary consult with one of our personal injury and insurance law team. We regularly meet with and represent clients in the denial of life insurance claims.