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Mortgage Insurance, Don’t Bank on it!

You bought your home from an agent you trust, you qualified for the Mortgage because of good credit, you shopped for a great mortgage rate to save money, and when it came to the mortgage insurance, you simply signed on the dotted line without asking “Is this a good deal?”.

Most people want to get life insurance when they buy a home, but are often too excited about the new house that they forget to ask any questions about the insurance. How many times have I heard, “I didn’t want to blow the deal, so I just signed”, or “the banker just told me to sign the document, so I did”.

It’s not too late to look around, and yes, you can cancel the bank insurance if you want.

Mortgage insurance at the bank is often very expensive for what you get.

Here are 7 things about Bank insurance you should know:

1. Money: Bank insurance is often very expensive when compared to a private policy.

2. Coverage: Bank insurance is tied to the mortgage, so if you pay off or reduce your mortgage, the life insurance also reduces, even if you want to keep the same amount of coverage.

3. Premiums: Bank insurance premiums remain high, even when your coverage reduces.

4. Portability: If you renew your mortgage with a different bank, your insurance is cancelled by the bank, and you will need to be healthy to buy new coverage.

5. Beneficiary: Banks make themselves the beneficiary of your policy, not your spouse or your family.

6. Penalties: If you die, and the bank insurance pays the mortgage off, they often charge you a 3 month penalty for paying off the coverage too soon.

7. Qualifying for coverage: The Bank coverage is “Blanket” coverage and coverage is often declined for things private plans cover.  In other words, if you do not fit into the banks underwriting mold, you could be rejected.

Maybe it’s time to take a closer look at your coverage. If you have questions, you should call Corry Collins to see if you can get quality coverage that you control.  Corry Collins is a partner with Maritime Wealth in Halifax, and President of Living Benefits Atlantic. Visit:
www.maritimewealth.com

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