Did You Know that Your Bank Mortgage Insurance May NOT BE COVERING YOU?

When buying your home there were a lot of decisions being made . . . What price range? The type of financing? How much can I afford? What neighbourhood? . . . and more. Most likely, the final question was “What happens if I die before my mortgage is finally paid off?” The answer is Term Insurance – a cost effective way of managing risk and protecting your home.

While bank mortgage insurance might seem like a good solution, it would be an expensive mistake. We liken this to putting all your chickens in one basket and then handing it over to the fox to safeguard for you? Not very wise. But paying premiums to a bank to cover off the very same mortgage they own is doing just that.

Consider this. Your bank is the same institution that underwrites and issues your coverage, owns your policy and is the named beneficiary to part or all of the death benefit that YOU pay premiums on. Furthermore, you pay those premiums directly to them, automatically even.

Further, bank mortgage insurance only covers the mortgage and nothing else and the value to you declines as you pay off principle, even though the premium remains the same! Term Life remains at face value and can be used by your heirs for any expense not just mortgage. Considering the cost, term life delivers far higher value.

Ownership, premium & insurability guarantees, denial of claim risk are just some of the things you need to consider before making the decision to insure your mortgage. Decide to make an informed choice today. Give us a call today to find out more.

CBC MarketPlace Agrees

CBC MARKETPLACE-IN DENIAL MORTGAGE INSURANCE:

Not Always a Sure Thing

Mortgage Insurance: In Denial

“If you have a mortgage on your home, chances are good you also have mortgage insurance. The idea is that if you should become seriously ill or die before paying off the mortgage, the coverage will kick in and pay it off for you. It’s meant to offer peace of mind and to reassure you that your family will be able to stay in your home if anything should happen to you.

The reality falls a little short of that. In this week’s Marketplace investigation, we meet two families who bought the coverage and thought they were protected, only to have their claims denied when they became sick or died. In each case, the insurer said the applicant person had lied on their initial application form. It turns out a routine test at the doctor could be reason to deny your claim, if you don’t mention it. Had a cuff inflated on your bicep? That counts as being tested for high blood pressure. As Erica Johnson reports, the bank staffers selling mortgage insurance are unlicensed and rarely trained to explain the details and legalities of those insurance products. The result is people who pay premiums think they are[knowledgeable].”