The Edmonton, Alberta, law firm of Gorman & Koski LLP have an interesting post entitled "War Widows and Mortgage Insurance" on their blog, The Estate House, about the recent controversy over some insurers refusing (at least initially) to pay out life insured mortgages for Canadian soldiers killed in action. Apparently, some insurers took the position that a war exclusion applied in these cases.
Gorman & Koski address quite well the legal issues, and the difference between buying a life insurance and insuring your mortgage.
I don't know if the insurers were within their rights to deny coverage or not. But, setting aside the legal issues, it amazes me how some large insurers and financial institutions can spend millions of dollars on advertising to attempt to create good will, and then squander it by taking a hard line with their own customers.