June 3, 2014

Mortgage Insurance – What you should know

Mortgage Insurance If you own a home, it is highly likely you have what the banks call Mortgage Insurance, issued by them, which is attached to your home mortgage.

Therein lays one of the biggest and most convoluted perceptions of what in fact this product is and what it isn’t.

We will attempt to “demystify” and educate our valued clients, which in turn will provide you with a far superior alternative to what you may already have.

If a person has a mortgage on their home, chances are very good that they also have mortgage insurance with their bank. The idea is that if they should become seriously ill and die before paying off their mortgage, the coverage will be adequate and pay off their mortgage.

This feature is meant to reassure people that their families will be able to keep the home if anything should happen. In fact the reality falls short of that.

Consumers should be made awareof the true facts concerning Bank mortgage insurance and what you are not told.

In truth, bank staffers selling mortgage insurance are often unlicensed and rarely trained to explain the details and legalities of those insurance products. The result is that people pay premiums and think they are covered, only then realize when it is too late that they are not.

When applying and accepting the lenders version, after only a few questions the perception is that the borrowers are covered. No underwriting has been done and in fact, you don’t have an existing insurance contract. Underwriting is done and examined after death and may be contested on any technicality.

In fact, underwriting a person to qualify for life insurance by a licensed broker is always done prior the issuance of a policy, so that once issued the insurance company must pay all claims, with the exception of any fraud.

Source: CBC Learning>Program “Marketplace” / “The Mortgage Insurance Game”.