Questions you should ask before signing
for mortgage insurance with your
mortgage lender
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Individual
mortgage
insurance
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Insurance
from your
mortgage
lender
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Can I choose my own beneficiary for the insurance proceeds?
Because the mortgage lender is the policy owner, they automatically
become the beneficiary of all proceeds.
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Can I apply for more coverage for other needs?
You can apply only for an amount equal to the initial mortgage through a
mortgage lender.
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Will my coverage remain level throughout the mortgage period?
The amount of coverage available through a mortgage lender is limited to
the outstanding mortgage balance. This coverage amount decreases with
each mortgage payment made, but your cost will remain the same.
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Are my premiums fully guaranteed in the contract?
Premiums paid through a mortgage lender are on a group basis and therefore
can be increased on a group basis if the experience of that group becomes
unfavorable.
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Could I pay less if I am in good health and don't smoke?
Most mortgage insurance available through banks considers only the age of
the borrower to determine your cost of insurance. There is no preferred
pricing for better health risks.
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Does my coverage stay in force if I move or change mortgage
lenders?
Mortgage insurance at most banks is not portable. If you move or change
mortgage lenders, you must re-apply and qualify for new coverage with the
cost based on your new age.
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Can my coverage extend past my mortgage period?
Since mortgage lenders only offer coverage to protect the outstanding
mortgage balance, once your mortgage is paid off, regardless of time, your
insurance coverage will cease.
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Can I convert my coverage to a permanent plan, even if my
health has changed?
There are no conversion privileges with your bank's mortgage insurance.
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Am I guaranteed to receive advice from a licensed insurance
advisor?
Service representatives with mortgage lenders are not licensed insurance
advisors, and therefore cannot offer expert advice regarding your insurance
needs.
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