# Widows of the Fallen in Fight with Banks over Mortgages



## niner domestic (11 Feb 2007)

The widows of the fallen have been experiencing delays with their mortgage holding banks in paying out the death benefits from their mortgage insurance.  The insurance companies have been denying their claims based on the war exclusion clause. Article found here: 

  http://ca.news.yahoo.com/s/capress/military_widows_woes

This is a good time to remind everyone who is either in theatre or heading to theatre to check their paperwork on these issues.


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## armyvern (11 Feb 2007)

Well,

Perhaps the government should begin a Royal Commission and have an inquiry into this "insurance fraud" being perpetrated by those Companies raking in the record setting billion dollar profits along side the banks.

After all how can one legally be denied their insurance payout when Canada and it's soldiers are not officially at "war." Seems the double-edged sword is once again being weilded to shaft policy holders, our fallen, and their families. Disgusting.


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## vonGarvin (11 Feb 2007)

If a police constable falls in the line of duty, is she covered?

Also, I believe that the bottomfeeders insurance agencies have "declared or not" in their clauses wrt wars.


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## Matt_Fisher (11 Feb 2007)

Does SISIP not have mortgage coverage as part of their benefits?


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## Mapper (11 Feb 2007)

We had that clause in our mortgage insurance and we were both in at the time.  It makes for a nice money-grab by both the bank and the insurance company as both benefit from the interest of those drawn out insurance payments over the lifetime of the mortgage.  Not to mention the billions in yearly profits...someone's hands are in my pockets..


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## McG (11 Feb 2007)

Matt_Fisher said:
			
		

> Does SISIP not have mortgage coverage as part of their benefits?


Nope.  There have been other threads that have gone into the problems associated with SISIP max coverage being less than what one could get from other companies (but those other companies have that "no war" thing).



			
				TMM said:
			
		

> Is it time for SISP to get with the times and offer the 2x, 3x, 4x life model or even better go up to $1 000 000, which is not unheard of? After all with people living into their 80s it isn't all that much once amortised.


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## George Wallace (11 Feb 2007)

I have had several Banks and Financial Institutions call and offer insurance.  I declined all, but found it amusing to ask the caller what their "War Clause" was.  Most don't know anything about what they are selling and know nothing of the "War Clause", so it is not unusual to hear that many are getting caught in this "scam".


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## aesop081 (11 Feb 2007)

Just goes to show READ BEFORE YOU SIGN !!!


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## riggermade (11 Feb 2007)

It is not only the loss of life insurance, alot of banks offer insurance if one cannot work and they will cover your payments...we got caught in that scam  when I was in...my wife was told by a doctor she had to quit work while pregnant, which should have been covered by the payments we were making but because I was in and working the bank would not honor the insurance, needless to say we did not take that insurance when we bought our second house....military members have to go into all the fine print before paying out the bucks


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## Shamrock (11 Feb 2007)

"Act of War" in an insurance policy is a very flakey thing.  Peacekeeping/peacemaking duties are included in the clause, as well as domestic acts of terror.  This varies from policy to policy -- my mortgage insurance has no act of war clause and I ensured I was given that in writing above and beyond my insurance policy (from the bank manager).  Naturally, my policy predates September 11, 2001 and the bank has since re-instated its policy.

Some policies will simply state it will not cover death or disability resulting from act of war, and it's important that be explained in detail to the signee, preferably in writing, especially if said person is a soldier and deploying.  He or she may not be covered while deployed, but the insurance could try to weasel its way out of a claim resulting while on leave or during a non-combat deployment (such as DART).


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## riggermade (11 Feb 2007)

There is alot of things to go into when signing any type of policy...in my case it was at the Credit Union on the base in Edmonton...they knew full well I was in the military and when it came time to pay out their excuse was because I was employed the policy was void although that was not was explained at time of signing


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## Roy Harding (11 Feb 2007)

Matt_Fisher said:
			
		

> Does SISIP not have mortgage coverage as part of their benefits?



Notwithstanding (nice insurance type lead-in, don't you think?) MCG's comments above, I have used SISIP as mortgage insurance in the past.  I simply named the mortgage holder as the beneficiary, up to whatever the mortgage was worth, and my wife as the beneficiary for the remainder.  It's not "mortgage insurance" per se - but it worked.


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## charlesm (12 Feb 2007)

I have used SISP for a number of years because it is cheaper than mortgage insurance. Also after a few years I have paid down some of the mortgage but the rate from the bank won't drop until you renew your mortgage.

During our DAG TF 1-08 the lady explaining SISP warned us all about the "War Clause" in insurance contracts.

SISP is a good rate but you can only max out at $400K, which considering paying off a mortgage and having enough for 6 boys and the wife is cutting it pretty fine.


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## Armymedic (12 Feb 2007)

Better yet, do not get mortgage insurance if you have SISIP. I declined insurance at the bank, and just had to show that I held sufficient life insurance thru SISIP to cover my mortgage to the bank before approval....

Mortgage insurance is not mandatory.

More money in YOUR pocket.


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## a78jumper (12 Feb 2007)

I am not surprised . When my brother in law died in late 2003 of leukemia while in Reg Force service, my sister went to their Bank (the one with the comfy green leather chairs) to make arrangements for the mortgage insurance to be paid out, and was told "So sorry", chronic leukemia was an existing medical condition, bye bye. While it was true M  had the disease a total of five times from 1990 until his passing there was a period of more than five years in the mid/late 1990s where he had a clean bill of health and thus applied for and was accepted for the insurance on his mortage when it was renewed in 2000, after truthfully answering the medical questionnaire (he did not qualify fof the insurance at the time the mortgage was first taken out in 1993, having just recovered from the second bout with this awful disease)  Then XY Bank had no problemo with collecting the premiums for more than three years. But try to collect $97K from these skinflints after his death? All this from an institution that made billions in profit the same year. 
Fortunately my sister is no pushover and was not about to play the role of grieving helpless widow. She told the Bank Manager he had ten minutes to reconsider the Bank's position on the whole matter, and her next stop would be her lawyer's office next door to initiate a lawsuit for the money and punitive damages. She got the $$$$.


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## a78jumper (12 Feb 2007)

St. Micheals Medical Team said:
			
		

> Better yet, do not get mortgage insurance if you have SISIP. I declined insurance at the bank, and just had to show that I held sufficient life insurance thru SISIP to cover my mortgage to the bank before approval....
> 
> Mortgage insurance is not mandatory.
> 
> More money in YOUR pocket.



My experience as well. I never have insured a mortgage or loan, and in fact still carry the SISIP insurance I had while in into retirement. Right now costs about $28 and change a month.

Being adequately insured against all perils one might face in the course of a military career is one of the things that should be drilled into all service members from Day One. My aforementioned sister collected more than $1.6 million when M died. It can not bring him back, and he sure is missed, but on the other hand my sister and their three children live quite comfortably because of actions both she and M took prior to his passing.


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## GUNS (12 Feb 2007)

Mortgage insurance is a total ripoff. There are other means available that will cover your mortgage. I have been with my present life insurance company for more than 25 years and their adviser suggested I take out a life insurance policy to cover the value of the mortgage. It was cheaper and regardless how much was left on the mortgage if something happened to me, my wife got the full value of the life insurance policy. When I told my insurance company that I was rejoining the military, they said it would not affect the policy.

It maybe worth your while to check it out, life insurance instead of mortgage insurance.


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## George Wallace (12 Feb 2007)

Banks and Insurance Companies are in competition with each other.  Both are after your money, and both will offer you insurance that overlaps what the other offers.  If you have Life Insurance that covers your Mortgage, why get Mortgage Insurance from your Bank, and vis versa?  In the end the two may get together and then average out what you do receive should a "mishap" happen.  Instead of getting the $1 million from your Insurance Co. and another $1 million from your Bank, they will average them out to $1/2 million each.

In the end you are paying fees needlessly to institutions who will try everything in the books not to pay out any monies.


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## geo (12 Feb 2007)

When I bought my house I was single.  When the Bank asked me if I wanted Insurance... I told em, no thanks - you can sell the house in the event I die.  Now that the mortgage is almost paid off, my wife is still a little irritated over that remark but, she is happy the mortgage is almost done.


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## GAP (12 Feb 2007)

Just announced on CFRA that Manulife is reversing it's policy in this instance and will pay out on the policy. Not sure if this applies to all the policies or just this one.


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## armyvern (12 Feb 2007)

GAP said:
			
		

> Just announced on CFRA that Manulife is reversing it's policy in this instance and will pay out on the policy. Not sure if this applies to all the policies or just this one.



Well, at least it's nice to see at least one of them do the morally correct thing here...

Perhaps I may consider them now for my business. I know which ones won't be getting my business that's for sure.


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## George Wallace (12 Feb 2007)

I would not take this as a trend that they will change their ways.  I am of the opinion that this is a Public Relations Ploy that will help them save face at the present, but in the long run, now that the Clause has been brought into the Public limelight, they will begin to enforce it in the future.  I am sure there will be no removal of the 'War Clause' from Policies.  Now it will revert to "Buyer Beware".  You now know it exists.  If you buy it, then you are subject to it.  

The "War Clause" in policies, is a point I have made with many in the past.  Be aware of it and act accordingly.  The Insurance Companies are in the business of making money, not handing it out.  In the future, they will not capitalize of favourable publicity, but hold you to the terms of the contract you signed.

EDUCATE yourself of what the ramifications are to the "War Clause" in an Insurance Policy, and what it entails.  It does not necessarily have to be a "War", but could be any form of 'violence' in a Region with an 'unstable political situation'.  It could be a 'Terrorist event' like a bombing in downtown TO.  The "War Clause" is open to a very broad interpretation.


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## Wookilar (12 Feb 2007)

There are lending institutions that do not have a "War Clause, declared or undeclared." The bank holding my mortgage is one of them.

As many have said, SISIP is cheaper and there are few problems in collecting it, however, as has also been mentioned, $400K does not often leave a great deal for the family once the house is paid off. 

Many SISIP reps are trying to push to bring it more in-line with modern costs of living, but it is a slow process. It has to be self-supporting.


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## niner domestic (12 Feb 2007)

Another little clause one should be on the look out for is the manner in which insurance companies are paying out claims.  There has been a recent trend for them to only pay out in an annuity (monthly installments instead of a lump sum).  In those cases, if there were such a death claim, the insurance would continue to pay the monthly mortgage payment which on the surface is fabulous *until* the surviving partner either goes to sell the home and discovers the insurance is only on *that* particular home and that particular mortgage or attempts to re-finance the home/mortgage and discovers that they will require a new policy in their name.  So, take the time and read the fineprint on your policies and pay attention to the how's, when's and what's.


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## BernDawg (12 Feb 2007)

I was told once by a financial adviser that If I had SISIP max it out if I didn't GET IT!  The coverage is basically foolproof, the premiums are low and the pay out is fast.  All the banks, mortgage companies and the like are in the business of making money and they don't want to give you any if they don't have to. Loan insurance is a money grab pure and simple.  I especially like the look on their faces when I say no thanks I got it covered.
My .02

NTF.  The adviser was not affilated with SISIP or the CF and she sold life insurance to boot!


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## The Bread Guy (12 Feb 2007)

Well, to be fair, it sounds like the banks smartened up right quick.  Shared with the usual disclaimer....

*Flaherty tells banks to be 'generous' to war widows on mortgage insurance*
Canadian Press, 12 Feb 07
http://www.recorder.ca/cp/National/070212/n0212135A.html

OTTAWA (CP) - Finance Minister Jim Flaherty says he's going to bat for the widows of Canadian soldiers caught up in a mortgage-insurance fight with financial institutions.

Several widows of soldiers killed in Afghanistan say they were told by their banks or insurance companies that the mortgage insurance they've spent years paying into does not apply because their spouses died in combat.

Liberal MP Judy Sgro raised the matter in the House of Commons on Monday, asking what the government is doing to help the women.

"These individuals all deserve the highest respect and care from their government and all Canadians," Sgro said.

"When will they offer the widows and the families of our fallen soldiers automatic relief against future mortgage payments?"

Flaherty responded that he was "shocked" to hear about the situation and said he has already taken action.

*"I made it clear to the banks today that I expect them to be generous in their treatment of all widows in this country. I await their response and I will be pleased to report to the House with respect to their response as soon as it is received."*

Maureen Gillam, whose husband, Sgt. Craig Gillam, was killed last October in a rocket attack near Kandahar, said she received a letter days ago stating she could not benefit from her mortgage insurance because of a so-called act-of-war clause.

However, *hours after a reporter questioned Manulife Financial about the issue, the institution reversed its position and determined it would pay off the mortgage.*

*Manulife spokesman Tom Nunn said the bank is not changing its overall policy, but could review special cases like Gillam's to determine if the exclusion should be waived.*

For others, too, the process has been mired in mixed messages and stress.

Kendra Mellish, whose husband, Warrant Officer Frank Mellish, died last September in a firefight in Afghanistan, said she was initially told she would likely not be able to collect on her mortgage insurance because of a war exclusion clause.

*She pursued the issue with officials at the Bank of Montreal, who issued the policy near her home at New Brunswick's Canadian Forces Base Gagetown, and was told they'd look into it.

While awaiting an answer, Mellish was forced to continue paying her mortgage. Four months later, she said the bank revealed it had no such exclusion clause and would begin payments.

A spokesman for the Bank of Montreal said he didn't believe the bank has ever had an act-of-war clause and said the confusion could have resulted from a misunderstanding at the local branch.
*
The issue became so aggravating for widowed spouses that *Brig.-Gen. David Fraser, the Canadian who commanded NATO forces in southern Afghanistan for nine months last year, met with senior bank officials to sort out the matter.*

Fraser, who didn't want to identify which banks he approached, became aware of the problem after women whose husbands were killed on his watch in Afghanistan raised it when he visited them at military bases after his deployment.

*In another case, Cpl. Kelly Dove said she was initially told by Scotiabank that her mortgage would not be paid after her husband, Warrant Officer Rick Nolan, died last September.

But after Christmas, the bank informed her the mortgage would be covered.*

Scotiabank spokesman Joe Konecny said Monday there should never have been any question that the bank would honour the policy.

"We do not have an act-of-war clause and never have," Konecny said in an interview from Toronto. "There may have been some confusion at the branch level and the wrong message was provided and we apologize for any confusion or inconvenience."


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## proudnurse (13 Feb 2007)

That would be a hard thing for these widows to go through, especially the ones that have small children. Definately tough times for them, not only emotionally with loosing thier husbands, but also trying to figure out on thier own how to make ends meet without becoming homeless. My heart goes out to them. 

Rebecca


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## William Webb Ellis (13 Feb 2007)

I heard today on the radio that the benefits are being paid


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## Navy_Blue (13 Feb 2007)

Would it be to much to ask Canadian tax payers to pick up widows tabs??  

For the people who have the privilege of staying home and leading a normal life in this country I think its the least they could do.


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## Bruce Monkhouse (13 Feb 2007)

Yes, it would be too much.............then what, police, fire, corrections? Where does that line stop?


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## TAS278 (13 Feb 2007)

not that i completely disagree with you, but in a major conflict where do we draw the line? Right now that would work, hell the system is pretty much set up, the funds would just have to be allocated. Lets say we go to a full out conflict where more Canadians die. I am not saying that their sacrifice wouldn't be appreciated but everyone (including the member) is aware of their responsibilities before leaving for a tour. Taking the extra time to ask "the right" questions can save this heartache. I believe the article is more about "the knowledge is power" stand point. Insurance companies deny every claim. That is how they make money.... 

I do like where you are going though Ben


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## George Wallace (13 Feb 2007)

Not to be morbid or disrespectful; your idea may currently look good, but what will you opinion be if there were thousands of widows annually instead of 44 over a couple of years?


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## Cloud Cover (13 Feb 2007)

Navy_Blue said:
			
		

> Would it be to much to ask Canadian tax payers to pick up widows tabs??
> 
> For the people who have the privilege of staying home and leading a normal life in this country I think its the least they could do.



Yes, that is asking far too much of tax payers, who also work very hard for their money and have every right to expect that members of its armed forces make informed decisions about their chosen career paths and the risks associated therein, including the risk of dying and leaving your spouse with an unpaid mortgage.  Should the cost of such risk be spread amongst various policy holders of mortgage insurance, perhaps but not likely.  A more equitable solution would be for the government to pay the premiums of a capped insurance policy designed specifically for such risk, provided that the members also contribute to the fund and that any such members contribution is fully refundable upon termination of service, and perhaps even tax deductible without fear of clawback after termination of service.


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## Wookilar (13 Feb 2007)

I think it comes down to the fact that many people don't even know that war clauses exist. Look at the two banks that didn't even have one but the local branches thought they did. Everyone involved is becoming more educated about this issue. 

It is a standard clause that exists in many insurance policies that makes sense from a business point-of-view, it also makes sense for us and our families to use businesses/products that do not have such a clause.

Wook


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## Babbling Brooks (13 Feb 2007)

> I am sure there will be no removal of the 'War Clause' from Policies.



As someone who makes his living in the insurance industry these days (although not on the life insurance side of the business), I can second that pretty strongly.  The "extra-contractual" payments are a PR effort, period.  Many of the exclusions and conditions you see in any insurance policy are driven by re-insurers (companies that insure insurance companies, to put it simply), and they don't give a rat's hindquarters about public opinion, since the public isn't their client, the insurance company is.

I'd add that there are as many policy wordings out there as Campbell's has soups.  Allow me to reinforce what's been said a few times already: read yours in detail before buying, especially the exclusions, and ask for written clarification of any terms that are unclear or ambiguous.  If you can point to a paper trail that says you fully disclosed your circumstances and they sold you a deficient policy in full knowledge it wouldn't pay out, you'll have a decent case against them in court.

I'm of the opinion that SISIP's capabilities should be expanded upon to meet this need.  $400K is a ridiculously low maximum payout: if you're a MCpl at the top of your pay scale with a $100K mortgage and two kids you'd eventually like to send to college or university, you should probably be carrying close to $600K in life insurance.  That you *can't* through SISIP is absolutely astounding to me.


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## GAP (13 Feb 2007)

bought any houses in Alberta lately? ....mortgage coverage needs to be in the 350,000 - 500,000 area minimum, then everything else.


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## Roy Harding (13 Feb 2007)

Babbling Brooks said:
			
		

> As someone who makes his living in the insurance industry these days (although not on the life insurance side of the business), I can second that pretty strongly.  The "extra-contractual" payments are a PR effort, period.  Many of the exclusions and conditions you see in any insurance policy are driven by re-insurers (companies that insure insurance companies, to put it simply), and they don't give a rat's hindquarters about public opinion, since the public isn't their client, the insurance company is.
> 
> I'd add that there are as many policy wordings out there as Campbell's has soups.  Allow me to reinforce what's been said a few times already: read yours in detail before buying, especially the exclusions, and ask for written clarification of any terms that are unclear or ambiguous.  If you can point to a paper trail that says you fully disclosed your circumstances and they sold you a deficient policy in full knowledge it wouldn't pay out, you'll have a decent case against them in court.
> 
> I'm of the opinion that SISIP's capabilities should be expanded upon to meet this need.  $400K is a ridiculously low maximum payout: if you're a MCpl at the top of your pay scale with a $100K mortgage and two kids you'd eventually like to send to college or university, you should probably be carrying close to $600K in life insurance.  That you *can't* through SISIP is absolutely astounding to me.



Wise words, from someone in "the know".

Thanks, Babbling Brooks - your perspective is appreciated.

Roy


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## Babbling Brooks (13 Feb 2007)

GAP, I only brought up the example to show that if you've been in longer than 30 seconds, you've probably outgrown SISIP's capacity.  Which doesn't mean you shouldn't use it, just that it should be expanded so CF members can actually cover themselves properly with it.

Yeah, a $100K mortgage was lowballing, I know...


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## GAP (13 Feb 2007)

Babbling Brooks said:
			
		

> Yeah, a $100K mortgage was lowballing, I know...



Sorry, stepped in the dodo just trying to make a point...my apologies...


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## battleaxe (13 Feb 2007)

Navy_Blue said:
			
		

> Would it be to much to ask Canadian tax payers to pick up widows tabs??
> 
> For the people who have the privilege of staying home and leading a normal life in this country I think its the least they could do.



I think taxpayers do already contribute to the financial well being of the families of the fallen.  $250,000 through VAC (if death is service related), supplementary death benefits-(a government subsidized life insurance program), continuing survivors benefits and pension income/health care, education benefits for children of veterans, counselling services.

I agree that SISIP should increase their maximum payout. This would allow military personnel to customize their life insurance based on their own unique circumstances- if they need more coverage (more kids, bigger house) they could opt for that and pay for it accordingly.
When they are calculating how much coverage is required, however, should they not take the abovementioned benefits into account?
Am I overlapping some of the benefits?- They are all separate, right? None of them are clawed back somehow so that they don't reach the families? ie. SISIP life insurance is separate from VAC award/services is separate from SDBs-all of these benefits reach the families-none cancel the others out?

If this is the case (I'm asking) and if the bigger picture (of all the payouts and benefits) is brought into focus, does the financial well-being of families seem as bleak as it has been made out to be in this story?

I'm really glad that this topic came up because it will make people pay attention to what is available and what is not- what they should be aware of and who they should get their coverage from.  It also seems that the insurance companies themselves had better be doing the in-service thing for their employees- get them straightened out as well- so that they can better advise their clients.

There seems to be a lot of confusion on the subject...and I hope I haven't added to it by saying something totally out in left field.  I've never been a financial wizard so you'd be certainly helping me out by correcting me if I'm wrong- I could get my own affairs into proper order. 

 Hope I've been clear...

Bren


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## alfie (14 Feb 2007)

As of today the Canadian Bankers Association stated that all of their member banks will waive this clause if it is in their terms. I can't recall the media outlet that published this however.


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## battleaxe (14 Feb 2007)

alfie said:
			
		

> As of today the Canadian Bankers Association stated that all of their member banks will waive this clause if it is in their terms. I can't recall the media outlet that published this however.



Is this the one you read?  The Canadian Press piece...  http://www.theglobeandmail.com/servlet/story/RTGAM.20070213.wbankwid0213/BNStory/National/home.

Like many reports on this issue, I find it vague and non-committal- there's no mention of which financial institutions are involved.  It states, "a number of banks will not apply an act-of-war clause" and "it's not clear how many banks offered policies with the war exclusion clause, but that the majority don't". 

I'd like to know which ones will not apply an act-of-war clause...mostly, I'd like clarification as to what the banks who do apply a war exclusion clause consider an act of war.  

Currently, it seems that things are very much open to interpretation- and generally the way it is interpreted benefits the banks- and not the policy holders who had counted on the peace of mind they thought they had invested in.

In the G and M comments on this article, somebody brought up an interesting point, I was wondering if the lawyers on the site could weigh in here.

Somebody wrote about "reading the fine print": "Under this form of contract, any exclusionary clauses must be explicitly brought to the attention of the party who didn't write the contract - being in the fine print doesn't count. This is a well established point of law. If this case had gone to court the bank would have lost and had to pay costs as well.."

Is this valid?  Are the banks backing down because they know they are up against unwinnable (legal) circumstances- the fact that Canada is not officially at war, and that contract law will eventually bite them in the butt anyway? Did the insurance companies have a duty of care to provide the exclusions info to the families who are now having problems?  
It would take that whole 'they should have read the fine print' argument right off of the table and cut everyone a little slack-not to mention giving them a little leeway for being human and fallible.


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## Navy_Blue (14 Feb 2007)

To back track a bit...We knowingly sign up and understand the risks yes.  We also are willing to stand up understanding we might dye or be seriously disabled in our line of work.   No I wouldn't draw a line.  All public *servants* who in specific cases Soldiers, Police Firefighters even Doctors and Nurses, peace time and war.  We/They all serve the public with the understanding that it isn't safe.  Even if we went into WWIII it wouldn't bankrupt the country to payout peoples depts.  If it did we are in rough shape.  They are talking about another election this year the average cost of a campain is over $200mil. That's on our tab!  If the average remaining balance of a mortgage was $150K they could pay 1333 mortgages off for the cost of a cheap election campain.  Where is all the CHMC money piled up these days?


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