When you took your mortgage, your lending institution offered you "mortgage insurance" and you thought that it would mean good protection in the event of your death. Your heirs would inherit a mortgage-free home. Another problem well taken care of.

Here's news: Actually, it could be that you are not insured. Worse, as things stand now, it is your heirs who will have the big surprise.

The Association des intermédiaries en assurance de personnes du Quebec (AIAPQ, now defunked) had uncovered a significant number of cases where beneficiaries of " mortgage Insurance" were denied benefits although the policy owners had consistently and always paid their premiums in full and on time.

To start with, you must know that your insurance application will be usually examined by the insurer only when the claim is filed . No Claim? No verification ! Even though you have paid all your premiums.

Maybe you failed to fully understand the meaning of a question asked by the clerk when filing out the insurance papers. Or maybe he forgot to read aloud the insurance questionnaire form. Then, the insurer may refuse to pay a claim, under the pretense that you made a false declaration. but , you won't be around to defend yourself.

Did the loan clerk omit mentioning the conditions of the contract? For example, the provision regarding pre-existing medical conditions? Because in the case of "Mortgage Insurance" the insured does not usually receive a copy of the contract, he will never be informed of all its provisions.

Have you forgotten to provide certain documents you were asked when you signed your " mortgage insurance" application? Nobody ever asked again and you thought, therefore, it wasn't a very important matter . Beware! The insurer probably won't discover your oversight, unless a claim is made. Then he may refuse to pay. Unfortunately , for you , it will be too late.

By the way , do you who who your insurer is? If you're under the impression it is your bank, caisse populaire or trust company, you are wrong. Your mortgage lender uses the services of a life insurance company which undertakes to pay the claims under certain provisions stated in a group insurance contract, which is held by the insurer. Under current legislation, the lender does not have a to give you a copy.

 

The above article "If You Own A "Mortgage Insurance Policy" was distributed by the AIAPQ in 1997. To receive a copy click on "copy of article". This Mortgage Services referral Website serves Western Quebec and National Capital Region.