Riku Kopra’s life fell apart after he lost his wife and unborn child. Soon after he learned his mortgage insurance claim was denied because his wife was once prescribed antidepressants.
Banks profit by selling mortgage insurance, a policy protecting borrowers in case of death, disability, illness or unemployment. Coverage is issued for healthy, employed 18-59 year-olds.
Riku Kopra and his fiancée, Marika, took out the popular policy, which is tacked onto to around half of new mortgages in Finland. The couple thought their future was safe by paying extra 100-euro premiums every month to cover their 200,000 euro mortgage.
“No one told us about the bank’s definition of health,” Riku Kopra told Yle’s current affairs programme Ajankohtainen kakkonen.
The policy did not activate after Marika died last October from a brain aneurism. Riku received a letter from Genworth Financial, which insures OP’s clients, stating that the policy was void because Marika had failed to disclose information on her health.
“Marika saw a doctor at Turku University’s student health centre after her grandfather passed away. She was prescribed antidepressants, which she took for a while,” Riku said.
The fine print
A policyholder can lose cover if the insurer deems the customer failed to disclose material information. At the moment social insurance institution Kela reimburses half a million Finns for antidepressants. Does this mean they are not covered by mortgage insurance?
Leena Snellman of the Financial Ombudsman’s bureau says problems have arisen regarding the many grey areas regarding policyholders' health.
“Mental illnesses fall into a category where companies take a very strict position,” she said.
Riku Kopra told Yle that enthusiastic loan officers are fooling clients by maintaining that only serious health conditions affect coverage. Banks for example say short-term illness has no bearing on mortgage protection policies. Riku said his wife's blues were only temporary, but this did not matter.
According to Snellman, loan officers need to learn to explain the legalities of the insurance products they sell, especially in terms of mental health issues.
During the taping of the Ajankohtainen kakkonen episode, Genworth Financial had a sudden change of heart and revisited Riku’s case. The company has since issued a new decision, granting Riku 180,000 euros, the remainder of his loan, for “humane reasons.”