Mortgage/Home/Life insurance policies
 

Never had any sort of substantial policy before outside of residual coverage from visa/work/travel etc.

Recently remortgaged for a line of credit and during that time our bank which we have both mortgage and HELOC with offered a fairly standard policy for Life/Disability/Critical Illness. The downside is what you’re paying for this way is only to have the remaining balance of your mortgage covered if death or critical illness were to occur.

For both my wife and I it’s essentially $50 each per month for the 3 stage policy, however I feel like for $50 a month we can probably get more coverage for the same or lesser money.

What do you guys do for your policies? Any recommendations?

The bank tries to say their upside is you don’t have to pass a physical/blood/urine sample to qualify, but that shouldn’t be a problem for either of us

We have life and critical illness through Manulife. Standard 20 year term for life and 10 year critical illness for 23 conditions. We had to do a questionnaire and a medical exam (blood and urine) for both.

We are both healthy and we pay approximately 1600 per year in total for both policies. We have a small mortgage, so only 500K for our term policies.

My wife and I are also with Manulife, life insurance only. We have the same 20 year plan but we're 11 years into it. We have $350K coverage and when we got this policy my wife was a Type 2 Diabetic so we paid a premium. $85.00 a month total, I'm sure now it would be more this was 2006. We also have around another 100K each through our work policies. We don't owe a lot on our home or have many debts, so for us it's a comfortable amount.

Probably one of the worst type of insurance to get IMO. There's 3 'types' when it comes to life insurance - think of it as buying, leasing, and renting. The last one, is pretty much like ICBC car insurance - you pay a premium...and if nothing happens they take each and every single cent of your $. Nothing get carry over.

That's pretty much what the bank is offering you - and even worse. Like you said, the coverage get lower and lower as you pay off your house mortgage.

Without knowing you & your wife's details, I can't comment on the $50 and if you can get better or worse policies. If you wish to chat, feel free to give me a PM.

Just got life recently through Manulife just your basic I die she gets 1 mill and vice versa. Standard blood and urine test and the terms was 20 or 25 I forget but none the less she was around $50/month while I was around $170/month b/c I said I was a smoker. Been clean for 3 months, another 9 and I can retest and lower my rate which will be closer to her monthly cost.

anytime you need to get a life insurance policy for your mortgage on your home - never trust the bank product.

You want a life insurance policy from a third party.

Why? if you ever switch mortgage providers, the new mortgage company will want a new set of medical exams. You may not have any medical conditions now as you are young but as you get older, something is bound to throw red flags. A third party product, you just show the new mortgage company you have a life policy and they cross off that box and not harass you again.

Another thing that will make your blood boil on the mortgage product's life insurance - post mortem underwriting. Google it.

This is a fairly common question that comes up when people get offered life insurance through their bank. Bottom line the banks product is inferior in every way other than price (most of the time).

The reason those medical tests exist is because policies from manu/canada life/sun etc are pretty rock solid and once you're approved you're going to benefit from the policy. The banks try to more or less trick you with their 1 question all encompassing application. Also like you said the policy is only paying the balance so its basically reducing over time while the premium isn't.

The only thing you really can do is sit down with an agent/advisor for an hour or so and get some ideas on third party products vs what you're being offered through the bank.

I believe a few of us on this board in the business have answered this question before as well so you might want to search some old threads.

Full disclosure, I work in the industry (in banking previously, in the insurance industry now) I don't want to fear monger but I do want to educate my fellow revsceners.

The insurance policy through the bank can be inexpensive (perhaps even significantly cheaper) for certain people vs personal insurance policies; this applies primarily to smokers because they don't differentiate between a smoker and a non-smoker. Example check out the RBC rates: Life Insurance Premium Rate Chart - Residential Mortgages by RBC Royal Bank. It could also apply to people at the top of an age band (in the RBC link an 18 year old would pay the same price as a 30 year old, for a personal policy, the price will most definitely be different).

The biggest downfall, as mentioned in an earlier post, is the underwriting for the insurance policies through the bank. The underwriting is done AFTER a claim is made, so if you even inadvertently answered their "yes/no" questions incorrectly, you could be SOL. Here's a partial exerpt from the RBC Mortgage Insurance FAQ:

Unfortunately this statement is catch all to possibly deny a claim. Watch the CBC Marketplace episode below for more info on this.

When you buy your own life insurance policy the underwriting is done BEFORE the policy is issued. Once the underwriting is done and the policy is inforce, an insurance claim cannot be denied unless the insurance can prove that a policy was acquired fraudulently (for example you are a smoker but on the insurance application you select non-smoker).

Other benefits of having your own personal insurance policy are

1.You own the policy, not the bank
2. You name the beneficiary (vs the bank being the beneficiary)
3. For a couple, you have double the coverage
4. The amount you apply for is the amount that you will receive (vs a declining amount as the mortgage is paid down)


Let me know if you have any questions and I will try my best to answer them.

My friend works for an insurance company and says you should actually push to get all the tests done if you're healthy. That way there is no question that you guys were qualified. He told me he was told of cases that people were screwed out of their policies because they found some old medical records saying they had conditions that they did not declare initially.

If you're young and healthy, get all the tests done anyway.

Just out of curiosity, what do you select if you only vape? Smoker?

What if you have a cigarette once a year? Does that still make you a smoker?

What happens if you weren't a smoker, but you happened to have a cigarette after the policy had been underwritten?

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Vape is concerned smoker.

The question is have you had any nicotine products in the last 12 months.

Once the policy is issues as non smoker you can do whatever you want after that.

40$/month rbc

should PM and set up a call with radioman.
dealt with him before on some my insurance needs.

one of the few non-slimy insurance guys i dealt with.

Yes, unfortunately one cigarette in the last 12 months and you are considered a smoker. As winson604 mentioned, if you quite smoking, keep track of when you last smoked because after 12 months you can apply for non-smoker rates.

And then I have to make sure I don't have any nicotine products for another 2 years right? Considering the agency has the right to cancel within 2 years?

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They would need to prove you were a smoker during the 12 clean months leading to you applying for non-smoker rates.