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Mortgage insurance
You've invested a lot in your home. Fire and theft insurance
covers the contents. What about protecting the people who
live there, your family, with mortgage life insurance? This
type of term insurance is available through most financial
institutions. When the unexpected happens - make sure your
home remains your family's home. Have the comfort of
knowing that the amount you owe will be paid and your
family can live mortgage-free.
Eligibility
If you are between the ages of eighteen and sixty-four,
and are the registered owner, spouse or guarantor of a
residential first mortgage you probably qualify for mortgage
life insurance. One or two people can be insured on each
mortgage. If you do not meet the age requirement, your
spouse or guarantor can still apply.
Coverage
Coverage starts on the date that you assume the mortgage.
With an existing mortgage, coverage begins on the date of
approval. Most financial institutions will insure up to two
mortgages for the same customer. The life insurance covers
the mortgage balance, at the time of death, up to three
hundred thousand dollars per mortgage. Coverage ceases
either when the mortgage is paid in full or if you sell the
property. It will also cease if the premiums are three months
in arrears or if you cancel the policy in writing.
Cost
The costs are determined by your age and the amount of
the mortgage. Protection is available for either single or
joint coverage. When two apply jointly the cost, based on
the older applicant's age, is only slightly higher (1.4 time)
than the cost of single coverage. For instance; a person
forty years of age, with a mortgage of $82,000, could have
a monthly payment of about $14.76. By adding a spouse the
same coverage would be $20.50 monthly. Premiums do not
increase due to age and will remain the same for the life of
a mortgage.
Application
To apply you fill out a short application at your financial
institution. If you can provide a "no" response to the three
health status questions, coverage is automatic. In some
instances, you may be required to provide additional
information to the insurance company. If so, any further
communication will remain confidential. In other words
that information will not be shared with your financial
institution or anyone else. Once insured, no further
medical evidence is required to keep your coverage,
regardless of any changes in your health, and you will
be issued a certificate as proof of insurance.
Flexibility
If you decide at a later date to add your spouse to the
insurance, he or she may apply for the insurance by filling
out the health questionnaire. The premium will be based on
the age of the older applicant and the current balance of the
mortgage. If you decided to finance renovations to your home
by adding to your existing mortgage, you would re-apply for
insurance on the new amount following the original procedures.
Peace of Mind
To decide if mortgage life insurance is for you, do some comparison
shopping, ask questions about rates and options. You've invested a
lot in your home. Now, invest in peace of mind.
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