TD mortgage insurance

[aypi]

hey guys, just need some opinions and advice.

we just signed our mortgage with TD (we move it from CIBC) and they are offering us a mortgage life insurance for an extra $97 a month. we are not sure if we should take it or we have any other options.

for the home owners out there, do you have a mortgage insurance? if yes, with who and how much are you paying?

thanks.

[broken_legs]

Banks are so smart!

Not only do they force you to buy their insurance via CMHC, they also sell you your insurance again on the same mortgage!

What a joke. You should be able to buy your own insurance policy on your own mortgage that pays you - NOT THE BANK - So you can pay the bank if you default.

[bignerd]

Generally life insurance on a mortgage provided by the mortgage company is in the banks own best interest. Your actual rate goes up as you get older and your benefit goes down as you pay down your mortgage (i.e. if something happens and you only owe $30,000 on your mortgage that is all that is paid off to the bank).

And yes, any money goes straight to pay off your mortgage at the bank!

Many people suggest just getting a life insurance policy although the application process for this can be more stringent than for mortgage insurance, however you can lock your rate in for a certain amount of time, choose the amount of coverage you want, do what you want with the money if that time comes etc...

[ornamental]

You might want to check out www.cbc.ca/marketplace/in_denial

have a look, thoughts? its made me very skeptical

[aypi]

thanks for the input guys.

when i was with CIBC i didn't get their mortgage life insurance. i was just considering it now because i now have a daughter and i want them to be set IF something happen to me. but like others said, i know its not a sure thing. a friend of my mom have it on their mortgage and when the husband past away, they denied the claim because the bank investigated his health history.

and also they didn't force me to get it, they just ask me if i want it added or not and i told them i will think about it.

so whats the best thing to do then? just get a mortgage/life insurance somewhere else? both me and the wife have a life insurance right now. should we get a separate one for our mortgage? sorry i really don't know much about this stuff.

and BTW, i didn't have to pay CMHC so thats good.

[JordanAndrew]

I have mortgage insurance on my place at the moment. It seemed like a good idea to have especially when I still owe them a good chunk of change in my mortgage. As I start paying off the mortgage, I'll probably end up taking it off. But that's not for a while.

As for who, both my Mortgage and my mortgage insurance are through TD as they offered me the best rate anyways.

I pay $71/month at the moment. I've had bad luck in the past and it's nice to have a back up in case something happens. It's peace of mind knowing that I'm covered.

[aypi]

Originally posted by JordanAndrew
I have mortgage insurance on my place at the moment. It seemed like a good idea to have especially when I still owe them a good chunk of change in my mortgage. As I start paying off the mortgage, I'll probably end up taking it off. But that's not for a while.

As for who, both my Mortgage and my mortgage insurance are through TD as they offered me the best rate anyways.

I pay $71/month at the moment. I've had bad luck in the past and it's nice to have a back up in case something happens. It's peace of mind knowing that I'm covered.

so you own the house by yourself right? i guess the $96 for me and the wife is not that bad then.

[JordanAndrew]

Originally posted by aypi


so you own the house by yourself right? i guess the $96 for me and the wife is not that bad then.

Yes I own it. How much is the mortgage btw?

[ianmcc]

Mortgage insurance ensures the bank get's their money. It's really insurance against them not getting paid. Don't bother-you can increase your life insurance for the mortgage amount far cheaper than $97/mo.

[aypi]

Originally posted by ianmcc
Mortgage insurance ensures the bank get's their money. It's really insurance against them not getting paid. Don't bother-you can increase your life insurance for the mortgage amount far cheaper than $97/mo.

that make sense. i will talk to my insurance broker (my aunt) about this.

thanks.

[dezmarez]

Originally posted by aypi
thanks for the input guys.

when i was with CIBC i didn't get their mortgage life insurance. i was just considering it now because i now have a daughter and i want them to be set IF something happen to me. but like others said, i know its not a sure thing. a friend of my mom have it on their mortgage and when the husband past away, they denied the claim because the bank investigated his health history.

and also they didn't force me to get it, they just ask me if i want it added or not and i told them i will think about it.

so whats the best thing to do then? just get a mortgage/life insurance somewhere else? both me and the wife have a life insurance right now. should we get a separate one for our mortgage? sorry i really don't know much about this stuff.

and BTW, i didn't have to pay CMHC so thats good.


That's exactly it, you want to make sure you are covered in case something happens to you. Now is the $97 just life, or did they include a critical illness quote as well? The thing with the mortgage insurance, once you sign up, your premiums will stay the same for the remainder of the mortgage, as long as you don't refinance, so even though you are paying the same premium as your mortgage goes down, you are getting older as well and it sort of off sets the cost. That being said you can get life insurance outside the mortgage insurance, and do term insurance for a certain amount of time, once your term ends, your premiums usually go up.

And to a couple posters above, CMHC isn't really related to mortgage insurance. CMHC is required when there is less then 20% down, it is YOU paying the banks premium to cover the mortgage. Mortgage insurance protects your life if you pass away. The bank doesn't get the house if you pass away, your family memembers (wife, child) would be mortgage free with a home to live in. Competely different.

I have scene cases where a husband has handled all the finances, (investments, mortgages etc.) and dies with no coverage, leaving a wife to handle everything, who doesn't work and is now stuck with a $200k mortgage. Not fun, not saying to take the Mortgage insurance, but you want to make sure you are covered regardless of where you are covered. Did they do a Insurance analyzer when you were with them?

[s2k_boi]

Originally posted by dezmarez



That's exactly it, you want to make sure you are covered in case something happens to you. Now is the $97 just life, or did they include a critical illness quote as well? The thing with the mortgage insurance, once you sign up, your premiums will stay the same for the remainder of the mortgage, as long as you don't refinance, so even though you are paying the same premium as your mortgage goes down, you are getting older as well and it sort of off sets the cost. That being said you can get life insurance outside the mortgage insurance, and do term insurance for a certain amount of time, once your term ends, your premiums usually go up.

And to a couple posters above, CMHC isn't really related to mortgage insurance. CMHC is required when there is less then 20% down, it is YOU paying the banks premium to cover the mortgage. Mortgage insurance protects your life if you pass away. The bank doesn't get the house if you pass away, your family memembers (wife, child) would be mortgage free with a home to live in. Competely different.

I have scene cases where a husband has handled all the finances, (investments, mortgages etc.) and dies with no coverage, leaving a wife to handle everything, who doesn't work and is now stuck with a $200k mortgage. Not fun, not saying to take the Mortgage insurance, but you want to make sure you are covered regardless of where you are covered. Did they do a Insurance analyzer when you were with them?


:werd: Ultimately you just want to be covered if anything happens to you. Yes it does ensure that the bank gets paid w/ mortgage insurance, but either way the objective is to be debt free (either you take your insurance payout and go into the bank to pay off the mortgage or it's done in one step).

Do the insurance analyzer as stated before, secondly I believe you also have 30 days w/ no obligations to cancel without cost (so you can shop around or get quoted by your aunt in the mean time and know that your covered for a period) :thumbsup:

[Zewind]

Do not take it with the bank, its pretty much the biggest scam out there. A Life Insurance Agent could most likely get you a better plan and cost less.

[bighead2267]

need to be very very becareful with any type of mortgage insurance. MAJOR concern is they don't underwrite your policy until you are dead which means they could refuse to provide coverage by whatever existing health condition and return all the premium you paid without coverage.
second, you will be paying higher premium while you getting lower coverage.
I highly suggest you should contact life ins broker to get a term coverage.

good luck

[aypi]

thanks a lot for all the help guys. and yes, i do have 30 days w/ no obligations to cancel without cost so i guess i will shop around first. but no matter what i will want one for my mortgage, i just cant take the risk of not having one. its just a matter of finding the right one.

[bignerd]

What do the $76 and $96 a month premiums entail? I would have to look at our loan but I think we pay $18 a month for two of for life insurance through the bank.... Yes I know that I do know better and posted against it, but it was cheap.

We have a smallish balance owing and are both non-smokers (smokers pay more) and were younger at the time so were in the lowest bracket for the rate.......

[Mys73ri0]

If your wife and you work at companies that offers any sort of decent benefit package you will be better off getting life insurance through them to cover your mortgage. All you have to do is make sure your life insurance policy is big enough to cover your mortgage as well as whatever your family may need to survive.

Eg.
If you die:
Mortgage = $200,000
Your wife and kid's yearly expenses if you dead: $20,000 (x15 years?)

Life insurance policy = $200,000 + 300,000 = $500,000

That's just an example, you need to do calculations that cover your costs. Most people always think, my insurance policy covers my mortgage but never think of the second part, the expenses after the house is paid off.

[Cos]

Get rid of it and get generic life insurance. If you buy mortgage insurance ($90.00 is a lot a month) all it does it pay off the mortgage. So your premium is based on 400,000 (or whatever your mortgage is) lets say you pay 200k off your house, your insurance only covers 200k although you are paying a premium for 400k.

Where as life insurance (mine and the wifes is around $50.00 a month) is ALWAYS worth 400k whether or not you owe 400k or 0 on your house. Personally we bought life insurance policies.

In my case the 400k would be better for my wife as she could pay the mortgage and bills, where as if it paid off the mortgage she would still need to make ALL the other payments. It would screw her over.

[dezmarez]

Originally posted by Cos
Get rid of it and get generic life insurance. If you buy mortgage insurance ($90.00 is a lot a month) all it does it pay off the mortgage. So your premium is based on 400,000 (or whatever your mortgage is) lets say you pay 200k off your house, your insurance only covers 200k although you are paying a premium for 400k.

Where as life insurance (mine and the wifes is around $50.00 a month) is ALWAYS worth 400k whether or not you owe 400k or 0 on your house. Personally we bought life insurance policies.

In my case the 400k would be better for my wife as she could pay the mortgage and bills, where as if it paid off the mortgage she would still need to make ALL the other payments. It would screw her over.



This is true,

only benefit to mortgage insurance compared to your example is, your premiums will go up once your term insurance comes up for renewal, where the mortgage insurance is set at the premium as long as you keep the mortgage. If you look at quotes for mortgage insurance @ 25 years old that does not change.
Say you sign up for a term policy of 10 years, your premiums will be low, when that 10 years is up, your premiums will be based on your age,

again to the OP, was this including critical illness? life insurance isnt the only coverage that you want to have, you may want to look at critical illness, which covers in the event you were to have heart attack, stroke or cancer among other health issues.

[bignerd]

The bank I used to work at did not work their mortgage insurance that way.... your premiums on mortgage life insurance did go up with age, they had age brackets (21-27) (28-32) (32-38)...... etc... everytime you moved into a new bracket your premium went up, not by much, maybe a dollar or less.

As well your premium WAS based on how much was left owing on your mortgage. They did not make you pay for $400,000 of mortgage insurance when you only owed $134,000.... your premium was based on $134,000 and would be re-adjusted with every mortgage payment you made.

So technically you were getting into more expensive age brackets with time, but since your balance goes down it wasn't a big deal.

[dezmarez]

Originally posted by bignerd
The bank I used to work at did not work their mortgage insurance that way.... your premiums on mortgage life insurance did go up with age, they had age brackets (21-27) (28-32) (32-38)...... etc... everytime you moved into a new bracket your premium went up, not by much, maybe a dollar or less.

As well your premium WAS based on how much was left owing on your mortgage. They did not make you pay for $400,000 of mortgage insurance when you only owed $134,000.... your premium was based on $134,000 and would be re-adjusted with every mortgage payment you made.

So technically you were getting into more expensive age brackets with time, but since your balance goes down it wasn't a big deal.


Interesting, I know this is how Mortgage insurance is done on HELOC's, but for a mortgage didn't know places offered this.

[codetrap]

Originally posted by Cos
Get rid of it and get generic life insurance. If you buy mortgage insurance ($90.00 is a lot a month) all it does it pay off the mortgage. So your premium is based on 400,000 (or whatever your mortgage is) lets say you pay 200k off your house, your insurance only covers 200k although you are paying a premium for 400k.

Where as life insurance (mine and the wifes is around $50.00 a month) is ALWAYS worth 400k whether or not you owe 400k or 0 on your house. Personally we bought life insurance policies.

In my case the 400k would be better for my wife as she could pay the mortgage and bills, where as if it paid off the mortgage she would still need to make ALL the other payments. It would screw her over.

This is exactly what we did. We picked up a couple of Sunlife plans in the event that if either of us was killed or became critically ill and couldn't work anymore, the other was covered for up to 5 years of replacement gross income. Then we got our daughter a life insurance plan as soon as she was old enough. The advantage to that, is if she ever buys life insurance of her own through Sunlife, she'll be evaluated as if she was a 6 month old infant for risk because she'll have a paid up policy on her already.

The sunlife coverage is WAY better than what the stupid mortgage insurance was worth, has a residual value at the end, and pays out 5 times what our initial mortgage is worth without any tax implications. Unfortunately, this makes me far more valuable to my wife dead than alive, but since it's also true for her, it's created a really good detente in our home. We both sleep with one eye open. :P

[skandalouz_08]

Originally posted by codetrap


This is exactly what we did. We picked up a couple of Sunlife plans in the event that if either of us was killed or became critically ill and couldn't work anymore, the other was covered for up to 5 years of replacement gross income. Then we got our daughter a life insurance plan as soon as she was old enough. The advantage to that, is if she ever buys life insurance of her own through Sunlife, she'll be evaluated as if she was a 6 month old infant for risk because she'll have a paid up policy on her already.

The sunlife coverage is WAY better than what the stupid mortgage insurance was worth, has a residual value at the end, and pays out 5 times what our initial mortgage is worth without any tax implications. Unfortunately, this makes me far more valuable to my wife dead than alive, but since it's also true for her, it's created a really good detente in our home. We both sleep with one eye open. :P

I just had to quote this because this is exactly the route to go. Good on you!

I'm an independent Advisor and deal with life insurance on a daily basis. I advise all my clients to get individual coverage for their mortgage through (insert my company's name here) because not only is it similar in price, the underwriting is done right away (meaning you don't have to worry about possibly not getting paid in the future) and you're covered for a set amount either for a set period of time or for the rest of your life.

If anyone has questions about it feel free to PM me, I'd be more than happy to answer them for you.

[Sancho_Cheeto]

Yes it is a scam. The TD guys are drilled hard by their bosses to really push this type of insurance. When I declinded the guy was pretty offended.

Read the fine print. So many loopholes for them to weasle their way out.

RUN FORREST RUN