Mortgage Protection InsuranceThe best thing you can say about Mortgage protection insurance -- sold by large financial institutions is: Although it does tend to cost more than privately owned personal insurance. It does pay-most of the time!!! Unlike individual life insurance, credit insurance sold through the bank is not underwritten until the time of a claim. This means the claim made be denied, even though you have been paying premiums. It is meant to protect the mortgage holder (the bank) should you die prematurely. As the mortgage goes down so does coverage- but the good old payment stays the same! This means you pay more for this coverage than you would if you owned your own personal policy. To get you to buy this “mortgage protection insurance”, the Bank pitch goes something like this. The Banker
The Bank mortgage person looks up from the paperwork and says:“Would you like life, disability and critical illness insurance on your mortgage?” “Well how much does it cost?” You ask. The Bank employee consults a small chart and gives you a small monthly figure. It seems reasonable and the Bank employee adds “It can be very conveniently added into you monthly mortgage payment, so you will hardly notice it and after all it does protect your family.” Unfortunately not everyone who buys mortgage protection insurnce gets paid if there is a claim.
So you take the Bank’s offer and answer a few health related questions on a questionnaire and you are done. There is no reduced for non-smokers or for women. It is a one size fits all. The premium remains the same even though the mortgage amount is being reduced. With a personal policy, there are reduced rates for non-smokers, women and people in very good health. The coverage provided by the insurance remains the same as long as the insurance is in affect. In both cases the premiums remain the same. The difference is with a personal policy the coverage is still there and guaranteed. will it pay at all?If you die prematurely your loved ones could hear something like this.“Mrs Jones you and the children have the Bank’s heartfelt condolences at your loss. As far as the mortgage protection insurance is concerned, unfortunately your husband inadvertently checked off the wrong box on the health questionnaire when the original paperwork was done. I am terribly sorry to say the mortgage is not covered.” A number of people have heard this from Bank officials, over the years, with no legal recourse. To prevent this from happening to you (plus saving you some serious money). Talk to a professional insurance agent, bout owning personal life, disability and/or critical illness insurance. A personally owned policy from an insurance agent or broker, is underwritten at time of application. This means the insurance company decides whether or not they will pay out at the time you apply for the policy. If they won’t pay--they won’t give you the insurance!. An insurance agent can show you the difference in cost between the mortgage protection insurance the Bank pushes and quality personally owned insurance. When you got your mortgage--did you shop for it? Did you look around, investigate? Or did you just take the first mortgage you were offered with out question? So shop for your insurance! Get an insurance agent working for you, not an employee whose job it is is to protect the Bank. Your personally owned life insurance will provide a guaranteed death benefit, disability amount, or critical illness amount to or your family tax free should a tragedy befall you. Bank mortgage protection Insurance protects the Bank not you! And should the claim be denied the Bank can always easily foreclose on your family and take your home away. Personally owned insurance is your best, least expensive solution. See an Insurance professional. Have them do an analysis of your current situation.
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Terry Johnston J C Mitchell Financial Services Inc. Phone: 866-721-7781 ext. 232 |
