Youve found your dream home, the next step is a mortgage. You go to your local bank and apply for a mortgage. At the end you will be asked if you would like mortgage insurance, just in case someone dies, gets sick or even becomes disabled. This is the promise that if anything goes wrong, you will not have to worry about losing your home and paying your mortgage as this will cover it, because the bank takes care of you. Or will they? If you were to get insurance to cover your mortgage from a licensed broker, which banks are not licensed to sell (which they probably never mentioned either), your insurance would be underwritten before you start paying premium, which means before you start paying the premium you know 100% that you are going to get a payout. However, at the bank, with mortgage insurance, it is underwritten at the time of the claim, which means they only look into it, if you actually qualify when you need the money. There are a few MAJOR problems with this. To start you are the healthiest, on average, right now. In 20 years it is fair to say your health will not be as good as it is today. It cost money to do underwriting, to do the blood work, contact your doctor, and to do a review to see if you qualify for the insurance. The banks forgo this, and wait to do the underwriting at the time of a claim. In the words in the CBC Marketplace video attached below Well thats the beauty of it, they are collecting money on everybody, and for a lot of them they are not really at risk. The most profitable business you can write is a business where you collect premiums, but you are not really at risk. So if you currently have mortgage insurance, you are paying a premium and you may not even be covered. Not only do they not do the underwriting till the time of claim, the questionnaire you fill out is very broad and misleading, and many, if not everyone, does not fill them out correctly. Again from the CBC Marketplace video posted below, I have never seen someone fill it out correctly. You could die of cancer, and if you had high cholesterol, sorry you dont qualify because you cant get approved if you read the agreement correctly. So what percent of mortgage insurance claims pay out? 80%? 50%? Let’s try more like 2%, the only chance you have at a payout is if you are a perfect healthy person, and died from an accident. So if you are one the people who are paying mortgage insurance, it is about time to get it done correctly from a licensed broker. If you have mortgage insurance, or even loan insurance, please send me an email with the details to gaetane.skillings@investorsgroup for a complimentary review. Please check out youtube/watch?v=qe61HVGIwUo for a full video on this.
Posted on: Sat, 06 Dec 2014 18:13:59 +0000
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