Questions you should ask before signing for
mortgage insurance with your mortgage
lender
Insurance
from your
mortgage
lender
Individual
mortgage
insurance
Can I choose my own beneficiary for the
insurance proceeds?
Because the mortgage lender is the policy owner, they
automatically become the beneficiary of all insurance
proceeds.
NO
YES
Can I apply for more coverage for other needs?
You can apply only for an amount equal to the initial
mortgage through a mortgage lender.
NO
YES
Will my coverage remain level throughout the
mortgage period?
The amount of coverage available through a mortgage
lender is limited to the outstanding mortgage balance.
This coverage amount decreases with each mortgage
payment made, but your cost will remain the same.
NO
YES
Are my premiums fully guaranteed in the
contract?
Premiums paid through a mortgage lender are on a
group basis and therefore can be increased on a
group basis if the experience of that group becomes
unfavorable.
NO
YES
Could I pay less if I am in good health and don't
smoke?
Most mortgage insurance available through banks
considers only the age of the borrower to determine
your cost of insurance. There is no preferred pricing
for better health risks.
NO
YES
Does my coverage stay in force if I move or
change mortgage lenders?
Mortgage insurance at most banks is not portable. If
you move or change mortgage lenders, you must
re-apply and qualify for new coverage with the cost of
the new insurance based on your new age and with an
eventually deteriorated health status.
NO
YES
Can my coverage extend past my mortgage
period?
Since mortgage lenders only offer coverage to protect
the outstanding mortgage balance, once your
mortgage is paid off, regardless of time, your
insurance coverage will cease.
NO
YES
Can I convert my coverage to a permanent plan,
even if my health has changed?
There are no conversion privileges with your bank's
mortgage insurance.
NO
YES
Am I guaranteed to receive advice from a
licensed insurance advisor?
Service representatives with mortgage lenders are not
licensed insurance advisors, and therefore cannot
legally provide insurance advice even if they knew how
to do it.
NO
YES
Is my insurance fully underwritten by an
insurance company at the time I am signing the
mortgage contract and starting paying premiums?
The insurance purchased from a mortgage lender is
underwritten at the time of claim! Put in simple words -
you start paying insurance premiums, conveniently
included in your mortgage payments, even though you
do not know for sure if you are insured or not until you
actually submit a claim.
NO
YES
The above Table is self explanatory.
For Mortgage Insurance quote please
click here.
To download the above table in PDF please
click here.
You may listen to my interview for Radio Bulgarian Horizons
from January 5, 2014 on the same subject:
Mortgage
Insurance
Always Ask for the Best!