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Ontario man devastated to learn $150,000 line of credit isn't insured after wife dies

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An Ontario man found out that a line of credit he thought was insured actually isn't after his wife of 50 years died.

"When I found out I wasn’t insured, I was just devastated," said John Richards of Uxbridge, Ont.

Richards said he and his wife Sandra wanted to take out a Home Equity Line of Credit (HELOC) for $150,000, but they said they also wanted to have life insurance on the loan in case anything happened.

It’s estimated about eight million Canadians have a HELOC as a way to tap into the capital of their homes and access money for renovations, trips or general expenses.

Many people also choose to insure their HELOC with life or critical illness insurance with the same lender they have the line of credit with.

In 2018, Richards said, his wife was 69 years old when she signed for a $150,000 HELOC and he said they both thought the line of credit came with life insurance.

John Richards holds a photo of his late wife of 50 years, Sandra Richards, in Uxbridge, Ontario.

The couple used the HELOC to take family trips, do upgrades to their home and other expenses.

"I was always going to try and pay it down, but the life insurance was there as a stop gap," said Richards.

But when Sandra died in November of 2023, Richards found out the line of credit was not covered by life insurance. Their bank has a policy to terminate life insurance when a customer turns 70 years of age.

"I had no idea they could say, 'At 70, well we are not insuring you anymore,'" said Richards. who explained he was not aware he wasn’t paying insurance premiums because he thought the insurance was included in his monthly interest payments which are now almost $800 per month.

"I thought the charges they were charging me each month included the insurance," said Richards.

The HELOC is with TD Bank Group and in the terms and conditions of its life insurance agreement for the line of credit it does say that you are eligible to apply for life insurance if you are between 18 and 69 years old.

A spokesperson for TD Bank told CTV News Toronto in a statement: "This is an unfortunate situation, and we offer our deepest condolences to the customer for his loss."

"To preserve our customer's privacy, TD cannot comment on the specifics of the case. We encourage Canadians to speak with an insurance advisor to find the coverage that best meets their needs, and to review their policies regularly."

CTV News checked with other banks and they also have policies to terminate life insurance policies on HELOCs when customers reach a certain age.

Some lenders terminate life insurance policies on lines of credit once a customer turns 65 years of age, 70 years of age or even 75 years of age. You have to check with your individual lender to find out.

Richards said he wishes he would have known about the policy as paying the money back will be difficult.

"I can't pay that off. I’m sitting here on a fixed income. If I have to pay that off I could be dead by that time," said Richards.

If you have a line of credit with a lender you may want to check the terms and conditions when it comes to insurance. You may also want to consider buying additional coverage somewhere else to cover any debts you may owe. 

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