If you purchase your home, then chances are you would want your mortgage to be paid off should you become critically ill, or die. You probably got your mortgage insurance from the lender’s associated insurance company since it is convenient and premiums could be blended into the mortgage payments. However, are you sure there would not be any surprise when you need to make a claim?
An investigation from CBC shows that many have denied their mortgage insurance claims. From the case CBC illustrated, some creditors’ mortgage insurances have “Post-Claim Underwriting“. That means, they would determine you are eligible for the coverage or not at the time of the claim, even though you had been paying premiums all along.
The applications of the mortgage insurance are not as simple as most people thought, just a slight mistake in answering the questions might cost you the claim. It should always be explained throughly by an insurance agent. However, from the investigation of CBC, it is not always the case.
“As Erica Johnson reports, the bank staffers selling mortgage insurance are unlicensed and rarely trained to explain the details and legalities of those insurance products. The result is people who pay premiums and think they are covered, only to realize later that they are not.” (Quoted from http://www.cbc.ca/marketplace/in_denial/)
Above is the real case where a claim is denied after the applicant is diagnosed with cancer. As being mentioned in the clip, after the decline, his family had to max out their credit cards, borrow from friends just to save for their house. It is very sad in seeing how disappointed and helpless people are when they discovered the premiums they paid all along are not protecting them.
[note] Should you want to review your insurance policy, please feel free to CONTACT ME.[/note]
- Information can be subjected to change. Details and reviews are based at the time of this posting.
- Image Courtesy Stuart Miles/FreeDigitalPhotos.net