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The nation's banks have been asked to explain why their mortgage insurance policies do not cover families of soldiers killed in combat in Afghanistan.

Several widows of Canadian soldiers killed in Afghanistan say they've been told by their financial institutes that mortgage insurance they've spent years paying into does not apply because their spouses died while at war.

In Question Period on Monday, NDP leader Jack Layton charged the government to close that gap and end confusion for defence force families.

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"They have a labyrinth right now of obstacles facing them when it comes to dealing with these mortgage payments, and it seems to depend on how loud and clear they are able to have their voices heard. That shouldn't be the case," Mr. Layton said.

"Notwithstanding $19-billion of profits last year, banks are refusing to honour mortgage insurance because these men died in combat. It's a shame. It's indecent. What will the government do with respect to this injustice?"

Government house leader Peter Van Loan said insurance policies offered by the military do not have clauses excluding war and terrorism.

He said Finance Minister Jim Flaherty has written to the banks asking them to explain their policies "and perhaps exercise some deference in support of our troops who are doing their best and putting their lives on the line to defend Canadians and to defend freedom and democracy in Afghanistan."

Veterans Affairs minister Greg Thompson added that the new veterans charter provides $250,000 for every widow.

Maureen Gillam, whose husband Sergeant Craig Gillam was killed last October in a rocket attack near Kandahar, received a letter just days ago stating she could not benefit from her mortgage insurance because of a so-called 'act of war' clause.

Ms. Gillam, 42, said she and her husband bought the mortgage insurance policy in 2005 from Home Loans Canada through their bank, Manulife Financial. At the time, she said they made it clear Craig was in the military, but that no one informed them the policy might not apply if the Newfoundland native was killed in combat.

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It was only after she and relatives began going over the family documents that they came across the exclusion clause. Still, she filed the claim only to be told in a one-page letter that she would have to continue paying the monthly mortgage of about $450 for herself and her two teenage children.

"They knew he was in the military, they knew this was going on, why would you even get us to pay that without mentioning it?" she said.

Hours after a reporter questioned Manulife about the issue, the bank reversed its position and determined it would pay the entirety of the mortgage.

"Manulife has decided that it will make an extra contractual payment of the amount of insurance that would have been payable if there had been no exclusion clause,"

While Manulife spokesman Tom Nunn said the bank won't change its overall policy, it could review special cases like the Gillams' to determine if the exclusion should be waived.

For others, the process has been mired in mixed messages and stress.

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Kendra Mellish, whose husband Warrant Officer Frank Mellish died last September in a firefight in Afghanistan's Panjwaii district, said she was initially told she would likely not be able to collect on her mortgage insurance because of a war exclusion clause.

She pursued the issue with officials at the Bank of Montreal, who issued the policy near her home at New Brunswick's Canadian Forces Base Gagetown, and was told they'd look into it.

While awaiting an answer, Ms. Mellish, who has two children under the age of 15, was forced to continue paying her mortgage. Four months later, she says the bank revealed it had no such exclusion clause and would begin payments.

"Initially, it took a lot of work on my part and I didn't need that. I didn't need that at all," she said from Gagetown."

A spokesman for the Bank of Montreal at its Toronto headquarters said he didn't believe the bank has ever had an act of war clause and said the confusion could have resulted from a misunderstanding at the local branch.

The issue became so aggravating for widowed spouses that Brigadier-General David Fraser, the Canadian who commanded NATO forces in southern Afghanistan for nine months last year, met with senior bank officials to sort out the matter.

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Some banks appear to have modified their policies to accommodate members of the Canadian Forces.

Royal Bank of Canada normally has a war exclusion clause, but spokeswoman Beja Rodeck said officials waived it late last year for any member of the Forces killed in combat in Afghanistan "as a gesture of support for our military."

Still, there remains a confusing patchwork approach to the insurance schemes, with some banks maintaining the exclusions and others placing no restrictions on their policies.

Corporal Kelly Dove, whose husband Warrant Officer Rick Nolan died alongside W.O. Mellish last September, said there is so much apprehension and uncertainty surrounding the policies that families at her base in Petawawa are reviewing all of their insurance agreements to make sure they're covered.

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