The cost of fine print: woman’s insurance battle highlights risks of overlooking policy details

This photo shows someone signing an insurance claim form. (Credit: Shutterstock)

Harriet Schmeltzman thought her critical illness insurance would protect her financially. But after suffering a cerebral aneurysm, she discovered a clause in the fine print meant she wouldn’t get the payout she expected.

The single mother from Vaudreuil-Dorion, Que. said she decided to buy the $200-a-month coverage after a major car accident in 2022 left her shaken and worried about her son’s financial well-being.

Schmeltzman says she bought her policy from Industrial Alliance through a National Bank broker.

“He suggested this product, critical illness, that would be the best one to suit my needs. That if, God forbid, I got cancer, or a stroke or heart attack… so I thought it was perfect,” Schmeltzman said.

Fifteen months later, she was rushed to the hospital with a debilitating headache.

“When they said an aneurysm, I thought, ‘Oh, wow, at least I’m protected now, and I’ll be okay financially should it be something that would put me out of commission for a while.’ And unfortunately, it didn’t work out that way,” she recounted.

By the time she was discharged from the hospital three weeks later, her claim was underway, and she expected to receive the $50,000 payout within a few weeks.

But what followed was months of waiting, submitting various medical reports – some dating back years – while also dealing with her recovery, rehab and sudden unemployment.

“I jumped through all their hoops. I did everything they wanted,” she noted.

Finally, in December 2024, her claim was officially denied.

In a letter to Schmeltzman, which CTV News obtained a copy of, Industrial Alliance acknowledged that her medical report confirmed a diagnosis of a cerebral aneurysm.

However, the insurance company stated that for the claim to be payable, her medical records needed to show that she had neurological symptoms linked to the aneurysm that persisted for more than 30 days.

Schmeltzman said she immediately contacted her broker, who she says seemed unaware of the clause.

She alleges the broker never informed her about it.

In a statement to CTV News, National Bank said it could not comment on a specific client situation.

However, it noted that brokers take the time to understand clients’ needs and explain the details of their insurance contracts during the subscription process.

“While they can assist clients in their claiming process, brokers are not involved in the insurer’s final decisions,” National Bank said.

Medical law attorney Patrick Martin-Ménard said that he has encountered similar situations before.

“I think it’s important for people to read their coverage carefully, because oftentimes people face very bad surprises when something happens and then they find out that it falls in one of the gaps in the coverage that is present in the fine print,” Menard said.

He also explained that it’s common practice for insurance companies to take a “significant” amount of time analyzing whether the situation is covered or falls outside the policy.

In a written statement, Industrial Alliance said it carefully reviews each claim based on policy terms and medical documentation and that delays may occur if additional information is needed.

“In this case, it is our understanding that the broker did provide information about the 30-day waiting period and the necessity of receiving a diagnosis that complies with the definitions,” Industrial Alliance spokesperson Chantal Corbeil said.

Corbeil added that if a client has concerns about the claims process and contract, they have the option to seek a review by the regulatory body, which Schmeltzman did.

She also previously filed a complaint against the broker.

In January, she received a letter from a complaint officer at Industrial Alliance reaffirming the insurer’s decision to deny the claim.

In addition, the officer explained that the broker had fulfilled their responsibilities regarding the contract and the information provided to Schmeltzman.

“I have used up all of my life savings. I can no longer retire because I’ve used up all of my retirement money.” Schmeltzman said, adding that the experience has also taken an emotional toll. “I took out this policy specifically for this reason, so I would never be in this situation.”

Schmeltzman has filed a separate complaint with the Autorité des marchés financiers.