You can count on three main factors affecting the premium of your mortgage insurance. If you compare a similar policy, you may receive 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 mortgage 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.
Since the age and condition of the insured is one of the most critical determinants of when a policy will be paid, they are the most important determinant of how much it will cost. Many mortgage life and disability policies do not require a physical, merely a statement of health condition. This can be risky, since any statement that would infer good physical can be used negatively if the claim is processed and it turns out a health condition (or smoking) was kept from the insurer. Don’t think you can claim to be a non smoker and then collect on the policy because the insurance company didn’t know. The answer is, they will know; if you suffer a debilitating heart attack, the cause can almost always be found, and you will have paid all those premiums and still left your family unprotected.
The two types of policies on offer are regular, which includes smokers and non smokers, which of course, does not include smokers. Of course, the smoker’s risk is already calculated into that policy.
Needless to say, if insurance is going to cover anyone without looking to his physical health, there is a built in premium increase 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 calculated, and if you compared a quote for a 38 year old, same mortgage, same length left on the loan, it would be less than half that of a 50 year old. Even a substantially lower mortgage will not have that great an affect on the net premium for the policy. That age has the biggest impact should not be a surprise; the compant increases its collection period and decreases its payout period.
The amount that will be insured is, of course the next main concern of the policy. Up to about $250,000, the amount insured will not change the premium a great deal and will most likely fall within the quick quote easy application classes. But once the value of the property insured starts to go up, the insurer will require a full application and an individualized quote, and of course, the property itself will need to be assessed.
Tags: affordable life insurance, home, insurance, life insurance, mortgage, mortgage life insurance, real estate