Mr. F. had a term life insurance policy through this former employer, which also covered his wife as a dependent. On his 75th birthday, his coverage ended. He confirmed with the insurance company’s call centre that his wife’s coverage would continue because she was not yet 75. Not long thereafter, the company clarified that this particular policy had ended – but that there was an option to convert Mrs. F.’s coverage to an individual policy.
The insurance company explained that his wife’s policy had to be for a minimum of $50,000. However, Mr. F. wanted his terminated policy for $5,000 extended to his wife since she was not yet 75. When the insurance company denied his request, he brought the final position letter to OLHI and requested an independent review of his case.
OLHI’s Dispute Resolution Officer (DRO) read the insurance policy contract, which did outline that once coverage ended, the insurance company could issue an individual policy for an amount that did not exceed the old policy. For this reason, the DRO recommended the case be escalated to an OmbudService Officer (OSO) for further investigation.
After careful, thorough review, the OSO discovered that Mr. F. was confused about what a policy conversion entailed. He explained to Mr. F. that insurance coverage through an employer is known as “temporary insurance.” Once temporary insurance terminates, the policyholder has the option to convert that policy into an individual insurance policy. However, this conversion is not what Mr. F. was looking for; instead, he wanted his temporary insurance to continue until his wife turned 75. However, his policy stated that once the policyholder turned 75, all coverage for himself as well as his dependents would end.
As a result, the OSO maintained the insurance company’s decision.
Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.