Mortgage Insurance or Creditor Protection Insurance.
My research in 2011 was based on actual documentation from banking institutions.
Mortgage insurance is;
- Sold by banking institutions such as banks and credit unions
- Sold by Life Insurance agents or brokers as life insurance
- Not mandatory
Mortgage insurance with the bank;
- Decreases in coverage as the mortgage decreases
- Is underwritten at the time of death which means, if for some reason the bank feels there is a discrepancy and perhaps you had a medical condition you did not disclose then the banking institution’s mortgage section can deny the claim… NO MONEY for you!
- Type in mortgage denial in the computer and read some of the stories for yourself.
- CBC program Market Place has a documentary for sale that talks about people who have had their claims denied when someone died. (http://www.cbclearning.ca/business/finance/in-denial-the-mortgage-insurance-game.html
Questions from several banks include wordings such as;
“In the past (24 months, 36 months, or 5 years; depending on the bank) have you had or received;
- any tests
- have you consulted a doctor
- had medical treatment
- consultation or follow-up for
- been diagnosed with
- had and any known indications of
- taken any medication
- required follow-up
- seen a physician
These questions only serve to act as a base point to determine if you qualify for the insurance on the spot. Yes, you can get special permission to see if the company will cover you but offers no guarantees the money will be paid if you die.
Don’t lie or forget something, it may come back to haunt you; hmmm, it might not matter anyway!
Now that you have checked off the little boxes beside each question you are done…pay your monthly premiums until you die or the mortgage is paid off…or you change the agreements of the mortgage contract…
Yes, if you remortgage or consolidate a debt this may mean the insurance portion is affected and you may no longer qualify for mortgage insurance. The bank person may not mention this to you …he/she is not an insurance agent and may forget to tell you this important fact.
Maximum Issue Age for Mortgage Insurance
- Depending on the financial institution and can range from age 64 to age 69.
Death Notification limitations
Each banking institution or Credit Union has a specific time in which a Death Notification can be made. Failure to inform the banking institution of a death within the specified time can result in denial of the claim which means the mortgage will not be paid off.
You have “1” year to file a Death Notification with most banks in Ontario
You have “90” days to file a Death Notification with Credit Unions
An insurance claim form is needed when the life insurance benefit is to be paid.
A notice and proof of death is needed also.
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