How would you feel if you knew that the mortgage life insurance you get from your bank doesn’t actually offer full coverage when you sign up?
Wait… What? Here’s why:
- There is usually no licensed professional insurance broker in the bank offering the mortgage life insurance. The only advice you receive is in the form of a brochure.
- You are not offered much time to consider and evaluate the offer.
- The application form is usually no more than one page.
It’s the third point that could potentially pull the rug from under your family.
Beware the One Page Application!
The section on the bank’s application form relating to your health usually consists of a short summary question encompassing a range of typical health concerns and does not even come close to the highly detailed set of questions typical when applying for a bonafide life insurance policy from a licensed life insurance advisor.
It might take you more time to apply for an individual life insurance policy, as you will have to go through several pages of detailed medical questions and other disclosures relating to your lifestyle, family history of disease, etc. You will also more than likely receive a visit from a nurse to take your blood pressure, other vitals and possibly a blood and urine sample. If there are any problems, your doctor may have to send in a medical report about your health. All this evidence is then sent to an underwriter and carefully evaluated before they even issue a policy. All of this is done up-front so that there should be no question if you die and your family simply wants to receive a cheque so they can go on living.
Because the qualification questions on the bank-issued mortgage life insurance application are so short, they will do their underwriting after you die and your family will be subjected to that aggravation and possibly a denial of claim if they can find a loophole through the gaping hole in that very short application!
This could have tragic consequences!
Banks Don’t Like Complications
Because the bank-issued mortgage life insurance is issued on a simple accept/decline basis, you may be left without coverage if they decide you are not worthy. By working with a qualified, experienced broker you would very often be able to get coverage even though your particular profile doesn’t quite fit into the bank’s insurance “box.”
We covered all of this in a post titled “7 Things the Banks Don’t Tell You About Mortgage Life Insurance.” You can also receive our special report that takes a deeper dive into this issue that could so dramatically affect your family’s future should tragedy strike.