A Quebec great-grandmother got money back and an apology from the bank after she was first led to believe she'd get nothing if she cancelled her life insurance policy.

Ella Beck, 82, had been paying into her plan for more than a decade and was concerned about the ongoing costs. But she says the Bank of Montreal told her if she quit, she'd lose her entire policy and walk away empty-handed.

"I was so upset that I just said, 'That is unreal,'" said Beck, of LaSalle, Que.

She turned to the media for help, and, following a CBC News investigation, she learned she could actually cancel her policy and get some cash back.

Beck did just that, but she's still unhappy with how it all went down.

"That's very wrong," she said. "That should be presented to everybody that you have options."

'You lose everything'

Beck bought her life insurance policy in 2007, at age 71.

Her husband had just died, so she signed up for a plan she saw advertised on TV, determined that her five sons not be saddled with her eventual funeral costs.

"I [didn't] want to leave my sons with a debt," Beck said.

She got a Guaranteed Life-Plus policy that cost $30 a month in premiums for a plan that pays out $3,200 for a natural death — the likely fate for most people, especially seniors.

Beck was surprised to discover that she had already paid more into her plan than it would pay out, and that if she cancelled, she'd lose everything. (ssguy/Shutterstock)

The policy came under BMO's ownership in 2009. When Beck called the bank last month to get an update, she was surprised to learn that she had already paid $3,780 into her $3,200 policy — $580 more than it's worth.

Under the plan, she's obligated to make monthly payments until she turns 95, but its value will remain at $3,200. This didn't sound appealing to Beck.

"If I live, say, another five years, I am just enriching the bank," she said.

She inquired about cancelling, and says the BMO insurance representative she spoke with informed her she'd get nothing in return.

"[The rep] said, 'You lose everything,'" Beck said. "That's what shocked me."

BMO gives money back

Beck contacted CBC News, asking for help.

CBC News consulted insurance expert Lorne Marr, who said lifelong policies often offer options such as cash back if you cancel.

"Usually in the later years of the policy, there's a guaranteed cash value," said Marr, of LSM Insurance, an independent brokerage in Markham, Ont.

When CBC News asked BMO if Beck had any other options, such as getting cash back, the bank did not reply.

But Beck received a letter one day later from Josée Leblanc Leaper, customer service manager with BMO Life Assurance, informing her that she indeed had other options.

She could cancel her policy and get back $814.39 in cash. Or she could stop paying her premiums but keep her plan, which would decline in value to a $1,124 payout for a natural death.

Life insurance expert Lorne Marr says lifelong insurance plans often offer some type of compensation if you cancel your policy. (Lorne Marr)

Leblanc Leaper also apologized for the bank not clearly laying out all Beck's options the first time round.

"We take pride in the efforts we make to help our customers, and we seem to have fallen short on this instance," she wrote.

Beck has chosen to cancel her policy and take the cash. Although she loses the $3,200 payout, she now has money to put toward her credit card debt, and she's freed from her $30 monthly payments.

"I could do with the money," said Beck, whose sons have assured her they don't need the cash from her policy.

She says she accepts BMO's apology but is still upset that she had to turn to the media.

"I should have been informed right away of my options, but I wasn't given any options."

Life insurance lessons

BMO's letter to Beck also addressed her unhappiness about continuing to make monthly payments when she has already paid more into her plan than it will pay out.

Leblanc Leaper said that most insurance policies don't work like a savings plan, and that Beck's policy is designed to offer protection against an untimely death.

"If you have the good fortune to live a long life, that value of your full coverage does diminish," she wrote.

Insurance expert Marr says because Beck was in good health when she bought her plan, she likely would have fared better with a different type of policy.

He says her choice — a guaranteed-issue policy — generally offers lower payouts compared to other plans. That's because it requires no medical exam or health questions, and is best suited for people with severe health problems who would typically be denied other types of coverage.

Nonetheless, Marr says, many people may find the guaranteed policy appealing because it's easy to sign up and heavily advertised.

"It's marketed through the mail, so anybody could apply," he said. "And, really, only very unhealthy people should be applying."