Canada Life Insurance Quote: What Is Used to Price Mortgage Insurance Premiums?
Author: Michael M. Callender // Category: loansHow much you pay for your mortgage insurance premiums will hinge largely on three factors. Given the same policy, the premiums may be different based on how large the mortgage is, how old the insured is, and whether it is a smoker.
Both kinds of mortgage insurance-life to pay down the mortgage, or disability to continue mortgage payments-use these three things to determine 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 off the insurance are. Many mortgage life and disability policies will not need a physical, only a statement of health condition. This can be risky, since any statement that would infer good health can be used negatively if the claim is processed and it turns out a health condition (or smoking) was kept from the insurer. Many smokers think they may be able hide this fact and keep the premium lower, and believe the insurance companies can’t know. They will know, and if you have made incorrect statements on the application, you can jeopardize the entire policy.
The two types of policies offered are regular, which includes smokers and non smokers, which of course, doesn’t. The smoker’s policy is of course going to be more expensive than the non smoker’s.
Needless to say, if a policy is going to cover anyone without looking at his physical health, there is a built in premium cost for that. So those who are in very good health should consider going for the physical to see if lower premiums are available for him.
Age is a big factor in the way premiums are priced, and if you compared a quote for a 38 year old, same size loan, same length left on the loan, it would be less than half that of a 50 year old. Lowering the mortgage amount insured does not change the premium that much. None of this is surprising, because the insurance business is based on increasing the collection of premiums and putting off paying of policies.
The mortgage amount has an affect at a certain level, however. Up to about $250,000, the amount insured will not change the premium greatly and will probably fall within the quick quote easy application classes. But once the value of the home that is insured starts to go up, the insurer will require a complete application and an individualized quote, and of course, the property itself will need to be assessed.
Tags: home, insurance, life insurance, loans, mortgage, mortgage life insurance, real estate
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