Ms. K. adopted her daughter and enrolled her in a child development program (CDP), as recommended by the adoption agency.
At the CDP, an assessment showed motor problems, including an irregular gait. The next month, Ms. K. applied for critical illness for her daughter. In the telephone interview portion of the application, she said that her child had not been diagnosed or treated for development delays or bone, joint or muscle disorders. Ms. K. also said that her daughter did not have any other illnesses or conditions, and received no consultations or treatment from alternative health care providers.
Four days later, the physiotherapist at the CDP told Ms. K. that the child’s motor skills were of concern. Later that month, as a part of the insurance application, Ms. K. signed a declaration of good health. She confirmed, again, that since beginning the application, her daughter had not consulted with doctors or any other health care providers, nor had she undergone any diagnostic tests or investigations. Ms. K.’s daughter was approved for a $100,000 critical illness policy.
Two years later, a pediatrician outside the CDP diagnosed the daughter with cerebral palsy and Ms. K. applied for the policy benefit. The insurance company denied her claim for failing to disclose material facts during the application and in the declaration of good health. They provided a full refund of the premium.
When Ms. K. contacted OLHI, a Dispute Resolution Officer (DRO) carefully reviewed all the files sent by her and the insurance company. The DRO spoke with her to better understand her position. Ms. K. felt the CDP did not provide medical diagnoses – and the daughter was diagnosed long after the policy was issued.
OLHI agreed that the insurance company’s decision was sound. Although Ms. K. may have honestly believed that her daughter was in good health until long after she applied for the insurance, she incorrectly answered questions related to evaluations, investigations or consultations with health care providers or practitioners. These evaluations and consultations did take place at the CDP.
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.