Posts Taged mortgage-insurance

In our latest video, we talk about the best way to purchase mortgage insurance, outlining the difference between purchasing this from the bank and us.

Before buying insurance from your bank to cover your mortgage, please consider your options.

What does the insurance cover?

●     From the bank: only the balance of your mortgage

●     From us: whatever you need it to cover such as debts, line of credit

What happens as my mortgage balance decreases?

●     From the bank: the coverage amount decreases as your balance decreases.

●     From us: the coverage stays the same for as long as you own your policy

What if I switch banks?

●     From the bank: You might lose your coverage and need to reapply

●     From us: Your coverage stays the same, since it’s not tied to your mortgage

Who gets the benefit if I die?

●     From the bank: The Bank

●     From us: You decide who gets the insurance and how to use it, such as to pay your mortgage, medical expenses or child’s education- whatever is best for your family 

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If you have a mortgage on your home, chances are good you also have mortgage insurance. The idea is that if you should become seriously ill or die before paying off the mortgage, the coverage will kick in and pay it off for you. It's meant to offer peace of mind and to reassure you that your family will be able to stay in your home if anything should happen to you.

If you have a mortgage on your home, chances are good you also have mortgage insurance. The idea is that if you should become seriously ill or die before paying off the mortgage, the coverage will kick in and pay it off for you. It’s meant to offer peace of mind and to reassure you that your family will be able to stay in your home if anything should happen to you.

The reality falls a little short of that. In this week’s Marketplace investigation, we meet two families who bought the coverage and thought they were protected, only to have their claims denied when they became sick or died. In each case, the insurer said the applicant person had lied on their initial application form.

It turns out a routine test at the doctor could be reason to deny your claim, if you don’t mention it. Had a cuff inflated on your bicep? That counts as being tested for high blood pressure.

As Erica Johnson reports, the bank staffers selling mortgage insurance are unlicenced 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.

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