The case was tossed out of court even though the checkup that found the cancer was voluntary.
A man who bought a $1 million critical illness insurance policy was denied coverage when it was discovered he had thyroid cancer. The policy would not cover illness that was discovered within 90 days of its purchase.
A man who bought a $1 million critical illness insurance policy and later found out in a routine medical checkup he had thyroid cancer was denied coverage by his insurer.
But when Franco Provenzano sued Great-West Life Assurance, the case was tossed out of court even though the checkup that found the cancer was voluntary.
It all came down to the fine print: the policy didn’t cover illness based on examinations or tests conducted within 90 days of purchase. Since Provenzano’s checkup was 70 days after he bought the insurance, Great-West Life was off the hook.
Critical illness insurance pays a lump sum if you become sick with a listed life-altering illness, such as cancer, heart attack or stroke. There are no restrictions on how the money may be spent.
Provenzano bought the insurance on June 10, 2011 when he was 49, because his father and other close male relatives had died of heart disease at young ages. It covered him to age 65 for an annual premium of $19,006.
The policy included a standard exclusion clause for any form of cancer, if within 90 days of the issue date the policyholder has “signs, symptoms or investigations” that lead to a cancer diagnosis at any future date.
Twenty days before the end of the exclusion period Provenzano went for an annual check up. The exam included an ultrasound test of his neck veins to rule out heart disease. The scan revealed thyroid nodules that in some cases are malignant.
He was sent for more tests, including a biopsy, over the next several months. Six months later he was diagnosed with papillary thyroid cancer. When his claim for critical illness benefits was refused by Great-West Life, he sued.
His lawyer argued that because the neck ultrasound did not screen for cancer and the results were not initially linked to cancer, the exclusion should not be triggered.
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But Ontario Superior Court Justice Victoria Chiappetta disagreed and ruled in favour of the insurance company and ordered Provenzano to pay court costs of $15,000.
The cancerous thyroid was successfully removed. Under the policy provisions Provenzano had the option to either request a refund of the $19,006 premium paid, or continue the policy without the cancer coverage to protect him from other illnesses such as a heart attack. He elected to take the refund.
Dick Gilbert, president of Toronto’s Megacorp Insurance Agencies, has consulted on the development of several Canadian critical illness products over the last 20 years. He says the 90-day cancer exclusion is standard in most policies.
“Where somebody is accepted for a critical illness insurance policy, I tell them not to schedule any routine medical examinations within the next 90 days. That is just being prudent,” Gilbert says.
This decision is a reminder that it is important to read and fully understand insurance policies and exclusions. Courts try to give people the benefit of the doubt, but they will not hesitate to uphold clear and unambiguous language if it appears to reflect the true intent of the parties at the time they entered into the contract.