You can count on three main factors affecting 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).
Whether it is mortgage life insurance (insurance to pay off your home in the event of your death) or mortgage disability insurance (insurance that will pay your mortgage if you are unable to work because of a disabling illness or accident we are talking about, the factors that fix the premium are the same.
The age and health of the insured is of paramount importance to the insurance company, since they will determine for its actuaries what the chances of paying out are. There are policies that will not require that the health of the insured be certified by an examination. It is very risky to claim good health without it, however, because 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. Don’t think you can claim to be a non smoker and then collect on the policy because the insurance company didn’t realize. But if the cause of death or disability can be connected to the hidden condition, the policy can be voided, and the insured would have paid premiums for nothing.
The two types of policies on offer are regular, which includes smokers and non smokers, which of course, doesn’t. Of course, the smoker’s risk is already priced into that policy.
Bear in mind that insurance policies that are writable without a physical have already priced the additional risks into the premium. So those who are in very good health should think about going for the physical to see if lower premiums are available for him.
Age and health are such important oarts of the calculations that a 50 year old with 18 years left on his $210,000 loan will pay more than twice as much as a 38 year old with the same conditions. Even a much lower mortgage will not have such a great an affect on the net premium for the policy. None of this is surprising, because the insurance business is calculated on increasing the collection of premiums and putting off paying of policies.
The amount to be be insured is, of course the next main concern 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 need a higher premium and the insurance company will also insist on an assessment to prove the value of the property.
|
|