Dale had a universal life insurance policy.
When his insurance company told him they were going to charge him another premium for the policy, Dale decided to terminate it.
To avoid a Cost of Insurance (COI) charge, the insurer told Dale to send a signed insurance cancellation letter to the same day he terminated his policy.
However, Dale’s insurer didn’t inform him that he needed to include his social insurance number (SIN) in the termination letter. Without the SIN, his policy termination got delayed and Dale was charged the COI. As a result, he received a lower refund than expected.
After he received a final position letter from the insurer, Dale reached out to OLHI to review his complaint.
OLHI’s review confirmed that his insurance company did not tell Dale he had to include his SIN in the letter.
OLHI’s review also found that even after Dale sent in the letter with his SIN, the company asked for it again. OLHI recommended that the insurer reconsider the COI charge for two reasons:
The company did not initially communicate that Dale needed to include his SIN in his termination letter.
When the insurer said Dale needed to include the SIN, he did so, and sent the termination letter within the same day, so the company should have processed it effective as of the receipt date.
Consequently, the insurer agreed and backdated the termination and refunded the COI charge.
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.