Best Life Insurance Quote Canada: Why Does Your Mortgage Insurance Cost What it Does?
Posted by Michael M. Callender on June 26th, 2009
You can be sure of three main factors determining the premium of your mortgage insurance. If you compare a similar policy, you may get different quotes, based on the size of the mortgage, and the condition of the owner (age, smoker or non smoker).
Both kinds of mortgage insurance-life to pay off the mortgage, or disability to continue mortgage payments-use these three things to calculate the premium.
The age and health of the insured is of the utmost importance to the insurance company, since they will determine for its actuaries what the chances of paying out are. There are policies that do not require that the health of the insured be certified by an examination. It is very risky to claim good health without it, however, since the insurance company can deny any claim if it arises from a condition that they can prove to be known to you at the time the policy was written. Smokers, especially have to be careful of taking a chance on that ever present question: “How will the company know?” The answer is, they will know; if you suffer a debilitating heart attack, the cause can almost always be found, and you will have paid all that money and still left your family unprotected.
The two types of policies offered are regular, which includes smokers and non smokers, which of course, doesn’t. Of course, a smoker’s risk is already priced into that policy.
Needless to say, if insurance is going to cover someone without looking to his physical health, there is a built in premium cost for that. If you are in excellent health, you may be better off requesting a quote for a policy that requires a medical exam; you could quality for substantially lower premiums.
These factors can greatly affect premiums, and the premiums for a 50 year old, with the same size mortgage, will be more than twice as much as that of a 38 year old. Lowering the loan amount insured will not change the premium a great deal. None of this is surprising, since the insurance business is based on increasing the collection of premiums and delaying paying of policies.
The amount of the mortgage doeshave an impact on the cost of the policy. Up to about $250,000, the amount covered will not change the premium greatly and will most likely fall within the quick quote easy application classes. Larger mortgages command a higher premium and the insurance company will also insist on an assessment to prove the value of the property.